(Featuring Jim O'Shaughnessy, Managing Director & Hotel Group Leader, Barings Real Estate)

If history is a guide, the time to invest in hotels is when things look bleak. This appears to be one of those times.

https://www.afire.org/podcast/checkincast/

Hotels and retail properties have borne much of the global pandemic’s brunt since the spring of 2020 with COVID-19 ravaging the US economy and dramatically altering consumer behaviors.

And while the challenges facing the retail sector are as much about structural change as they are about cyclical weakness, the story is notably different in the hotel sector, which remains underpinned by long-term structural growth drivers.

That doesn’t mean the picture for hotels has been rosy. In fact, as a result of the global pandemic, US hotels saw their largest-ever decline in demand in 2020—with revenue per available room (RevPAR) down approximately 47.5% compared to 2019.1 And even this striking statistic doesn’t tell the full story, as it wasn’t until March 2020 that the virus started to truly weigh on demand in the US.

Jim O’Shaughnessy, Managing Director & Hotel Group Leader of Barings Real Estate talks about the underlying structural trends, in place long before COVID, and how they will intersect with the coming cyclical recovery—which will inevitably be uneven across the hotel sector and tied to factors such as location and property attributes.