The hotel industry can expect demand growth from individual business travelers and groups if COVID-19 infection rates continue to drop, according to the US Hospitality Directions: November 2021 report from PwC. Also according to the report:

• In 2022, as previously forecast, PwC continues to expect the vast majority of temporarily closed hotels will have reopened.

• With slowing growth in vaccinations and waning consumer optimism as the country heads into the final month of this year, lodging’s recovery is expected to remain uneven.

• Despite hotel owners continuing to staff up with increasing demand levels, October unemployment for the hotel sector increased to 12.9% (from 11% in September), compared with the US overall rate decreasing to 4.6% (from 4.8% the prior month).

• PwC projects that 2022 U.S. occupancy levels will reach 61.7%, up from the 57.1% forecast for 2021, and 4.3 percentage points below 2019's level of 66%.

The “bigger story,” according to the report, is the significant rise in average daily room rates (ADR) during the second and third quarters – exceeding 2019 levels in each month of the third quarter. The consultancy now expects ADR to increase 19.6% for the year, with resultant revenue per available room (RevPAR) up 55.1%, reaching about 82% of pre-pandemic levels.

Luxury lodging is expected to have the biggest demand growth in 2022 at 38.8%, but the upper-upscale tier is anticipated to lead RevPAR growth with a 40.3% year-over-year increase, followed by luxury with 23.7%.