World's largest commercial real estate services company CBRE Group this week reduced its US hotel performance projections for 4Q2021 because concerns about the Delta variant of COVID-19 are resulting in previously unanticipated slower demand for business travel, especially for global gateway cities (think: Boston, NYC, DC), northern markets (ditto) and hotels specializing in groups.

A CBRE spokesperson said:

“Unfortunately, for business-centric hotels, the rebound in business travel expected in September of 2021 is now delayed and will likely have a ripple effect into 2022’s corporate travel budgets.”

For all of 2021, CBRE now forecasts a US average occupancy rate of 54% and ADR of $112.85 for a RevPAR of $60.91, down 19.3% from the 2019 figure of $86.16.

Also CBRE expects convention business to pick up first at destinations with low operating costs, cheap air connections and fewer health restrictions - criteria that suggest planners will be looking at warm-weather destinations with low operating costs including, inter alia: Dallas, New Orleans, San Antonio, Las Vegas and Orlando.

For 2022, CBRE now forecasts occupancy to be up 8%, ADR up 7.1%, for a projected RevPAR increase of 15.6% vs. 2021.