March U.S. hotel performance this year looks much better than it did last year.

A full year after COVID-19 was declared a global pandemic, the U.S. is averaging administering almost 3 million vaccine doses a day, said Jan Freitag, national director for hospitality analytics at CoStar. Oxford Economics reports that gross domestic product grew by 9% in the first quarter, which has positive implications for the American travel industry.

In a year-over-year comparison, March 2021’s revenue per available room percentage change was “very positive” at 34%, he said.

“The percent changes going forward are going to be even more positive and maybe even a little hard to comprehend,” he said. “For example, for the week ending April 10, RevPAR in the U.S. was up 311%.”

Going forward, STR will show year-over-year percentage changes as well as comparisons to the corresponding months in 2019, he said. For most hoteliers, 2019 is considered to be a “normal year,” but it’s important to understand it was also the single-best year the U.S. hotel industry has reported for both room demand and occupancy. STR is CoStar’s hospitality analytics firm.

Looking at 2021 first-quarter data, the changes compared to 2019 are still negative, but slightly less so than in prior months, Freitag said.

“In other words, the recovery is firmly underway in the U.S. lodging industry,” he said.

A year ago, occupancy declined rapidly while occupancy this year is comparatively stronger, he said. The results are still well below the long-run average, but the expectation is that occupancy will continue to solidify through the summer thanks to ongoing leisure demand and a boost from corporate group demand after Labor Day.

STR breaks locations into six separate classes: urban, suburban, airport, interstate, resort and small town/metro. Hotels in resort, interstate and suburban location types have had a strong start to 2021, Freitag said. Leisure travelers who took to the road have driven this demand and lifted occupancies, particularly at interstate and roadside hotels.

Large urban areas saw relatively few travelers because corporate transient and corporate group demand lag consumer-driven demand, he said. Even in March, urban occupancy is still behind the better-performing location types.

For these calculations, STR uses a standard occupancy calculation, which excludes temporarily closed properties, he said. However, in urban locations, the difference in the number of temporarily closed room count is material at roughly 11% of rooms still offline, so STR uses total inventory when calculating urban areas.

The lack of corporate demand has affected the valuations of urban and upper-upscale hotels, Freitag said. CoStar News reported 1.3% of assets traded were in distress in the first quarter of 2019. In the first quarter of 2021, the number grew to 18%.

One of those distressed deals was the sale of the Hyatt Regency Austin to real estate investment trust Host Hotels & Resorts for $161 million, he said. Citing the news release, he said the sale price reflected a 20% to 25% discount to pre-COVID-19 pricing.

In contrast, the sale of the Mountain Chalet Aspen in Aspen, Colorado, for $68 million amounted to just more than $1 million per room, showing investors are eager for the expected return of high-end luxury leisure travelers, he said.

“We fully expect that with pent-up savings, a strong stock market and continued high employment rates for knowledge workers, luxury properties will continue to do well and will continue to trade at multiples that are not impacted by the pandemic,” he said.