By Luigi Major, Vice President, Houston at HVS
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The Los Angeles hotel market, along with the rest of the world, experienced an unprecedented drop in demand in 2020 following the start of the COVID-19 pandemic. Hotel occupancy declined to 49% in 2020, compared to 80% in 2019, while average daily rate (ADR) decreased to $139 in 2020 from $181 the previous year. Overall, revenue per available room (RevPAR) decreased 52.6%, the largest decline in the history of the market. Based on the latest dynamics of supply and demand, below we present our latest forecasts for the recovery of L.A.-area hotels in 2021 and beyond. As with the rest of the industry, while occupancy is anticipated to recovery more quickly, ADR losses often take many years to recover. Our forecast assumes a recovery to 2019 levels after 2025, as illustrated in the following table.