Back to list November 13, 2020 Lodging and Restaurant Industry Updates In the past several months, CAEDC staff members have attended a number of virtual seminars discussing the lodging and restaurant industry (including craft beer). Here are a few high-level takeaways from these meetings. Lodging STR provided a comprehensive overview of the current state of the U.S. hotel industry during a webinar on October 27. In April, RevPAR declined by 80%. It has improved each month from May to September but has stalled slightly in August and September. Group RevPAR is still down about 87.1% for the year. Based on projected 2021 forecasts, the pandemic has wiped out a decade of RevPAR gains (going back to 2010) in 2 years. In April, ADR declined by 44.5%. As with RevPAR, ADR has improved each month from May to September but looks to remain static this fall. The smallest RevPAR, ADR and Occupancy declines were seen in limited service hotels. High-end hotels have been hit disproportionately hard due to the lack of corporate transient and corporate group demand. Room demand is anticipated to be back by 2022 and ADR by 2024 (compared to 2019 rates). During their Annual Meeting, PRLA also shared some statistics regarding Pennsylvania. They noted a recovery period for the lodging industry from 2022 to 2024 with RevPAR matching or slightly exceeding 2019 number by 2024. They also noted that the amount of aggregate organic traffic gathered from 28 DMO sites hit its low point in March when it was down 64%. Traffic seems to have stabilized and in the last 6 weeks, it has been bouncing between 13% up and 5% down YOY. A recently published Travel Sentiment Study (November 4, 2020) from Longwoods International and Miles Partnership, also reinforced the message that US locals do not feel comfortable traveling due to coronavirus concerns. 58% have travel plans in the next six months, the lowest percentage since the beginning of the pandemic in early March. The percentage of travelers with travel plans in the next six months hovered around 70% for months after dropping from 87% on March 11 at the start of the pandemic in the U.S. As we near the holiday season, fewer American travelers plan to take a trip during the holidays. According to the most recent survey, 53% are not planning any travel during the holiday season, up from 48% a month ago. Some 38% are planning to travel by car during the holiday period, while 17% will travel by air. Restaurants/Craft Beer During their annual meeting, PRLA cited the Travel Sentiment Study from Longwoods International and Miles Partnership that only 47% of US locals feel safe dining or shopping in their community. They noted that limited service restaurants seem to be doing much better than others. At the recent Sell More Beer Summit hosted by the National Beer Wholesalers Association, presenters noted that there was a softening and slowing of the growth in the craft beer industry even before the pandemic and provided the following statistics: Industry employment is 2.1 million below pre-March levels 8M+ restaurant employees were laid off or furloughed Industry lost $200B March-September YTD Sept 2020, total industry volume is down 2.2% Suggestions for breweries/taprooms to recover include: Install enhanced air filtration systems to clean the air (and marketing efforts to inform customers) Package food & beer Data-mine existing customers via email & text to increase to-go sales User brewery equipment to diversify and produce non-beer beverages to supplement income Sell beer futures or start a monthly subscription to guarantee income Market/brand beer as a luxury product (look to the wine industry as an example)
