While still in the midst of the COVID-19 pandemic and travel restrictions, SDTA worked with Tourism Economics to develop a lodging forecast to support business planning. A strong attempt was made to incorporate all known data, the status of citywide conventions, and input from a considerable number of hotels as to the group outlook into the future. However, due to the high level of uncertainty around the extent and duration of the virus and containment measures, there is uncertainty in the forecast.
- National baseline assumptions include the following:
- Pandemic Timeline: Virus remains a defining factor through Q1 of 2021 with some regional outbreaks and second waves occurring. Progress in the development of therapeutics continues steadily, and a vaccine becomes available in early 2021.
- Policy Response: Easing of lockdown measures continues through the summer months; renewed lockdowns in response to virus outbreaks will be less severe. International borders will be slow to reopen around the world.
- Economy: The U.S. economy is in recession, with a 4.2% drop in GDP this year. However, recovery will be brisk in the second half of 2020, driven by pent-up demand and historic government stimulus. The path for the world economy will remain below pre-crisis levels.
- Within that context, the San Diego forecast assumes essentially no group business through February 2021. Beginning in March 2021, some group demand is included but forecasted down 45% compared to 2019, and up 59% compared to 2020. Small improvements are assumed from that point on.
- Thus, for the next 8 months, the forecast relies on the leisure and business transient segments to generate demand, which also remain a concern.
- Positive factors for San Diego include the following:
- Large regional drive market for leisure travel. San Diego has typically performed better than other markets in recessions and post 9/11 when travel restricts.
- Business activity supported by biotech, government, and federal/military-related sectors that are deemed essential.
- Strong long-term prospects as a group market.
- Key results for hotel room demand –
- Demand improved in June to a level 59.1% below 2019.
- Forecast assumes further improvement in July and August, but then performance is assumed to retreat in September through November to be about 50% below 2019.
- By April 2021, demand is expected to improve to 19.1% below 2019.
- Key results for room revenue –
- Room revenue decline of 58.0% is expected for 2020, but then will post 64.2% YOY growth in 2021.
- Recovery in 2021 to room revenue is expected to be 31.0% below 2019, which is a similar level as nine years ago.
- County occupancy in 2020 is forecasted at 47.4% with an average daily rate of $124.27 and RevPAR of $58.93.
- In 2021, county occupancy improves to 62.5% with an average daily rate of $140.17 and RevPAR of $87.67.
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