In March 2020, the rapid decline in travel and hotel use and subsequent response from the hotel investor and lending community was remarkable. However, even though the pandemic continues and government, corporate, and individual reactions remain varied, the U.S. hotel performance showed some improvement from the lowest point in the second quarter while coming to terms with the longer-than-anticipated full market recovery.
The second quarter of 2020 brought a range of subdued performances across the country. The summer travel season was especially supportive of properties in recreational destinations, with most success noted in markets within a one- to three-hour drive of a major population base. Highway hotel occupancy was relatively strong due to the increased car travel and extended-stay hotels benefited from contract-based demand, essential worker housing, and continued residential displacements and life events. In contrast, urban hotels, especially properties with extensive meeting space, were significantly impacted by the pandemic.
The nationwide performance improved in the third quarter relative prior months in 2020 but was still substantially below the results in 2019.