California Regional Lodging Forecast (December update)
Tourism Economics
Report (ppt) PDF Download
Report (xlsx) XLS
(Date of Publication: January 7, 2022)
Forecast through 2023 of key lodging indicators including supply, demand, occupancy, average daily rate, revenue per available room, and revenue for California and California regions.
MAJOR TAKEAWAYS
- Despite the elevated inflation environment, renewed Covid concerns and heightened market volatility, the economy is booming in Q4. Assuming the Omicron variant leads to a moderate pullback in activity over the coming months and some catch-up next spring and summer, we foresee real GDP growth of 4.4% in 2022 after a 5.7% advance in 2021.
- Service sector activities including leisure, hospitality, and travel are more severely impacted leading to a 1ppt annualized drag on GDP growth in Q1 2022, but this lost activity will be made up in the spring and summer next year.
- With employment having recouped around 85% of Covid job losses and wages rising rapidly, we expect to see compensation growth picking up the income baton from fiscal transfers.
- Occupancy rate for California is forecast to grow 24% in 2021, following a 34.5% projected decline in 2020. Occupancy is expected to return to 96% of 2019 levels in 2023.
- ADR in California is forecast to grow 16.9% in 2021, following a 23.6% projected decline in 2020. ADR is expected to return to 97% of 2019 levels in 2023.
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