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Market Analysis <br />27 <br /> <br />NATIONAL OVERVIEW <br />Hotel Market Summary <br />The following overview was derived primarily from CBRE Hotels Research (CBRE Hotels) 4th Qtr. <br />2020 Hotel Horizons© report for the United States, as well as CBRE Econometric Advisors (CBRE- <br />EA), and Kalibri Labs. <br />According to Kalibri Labs and CBRE Hotels, the annual occupancy rate for the U.S. lodging <br />market was 41.7% in 2020. This is the lowest annual occupancy rate since the Great Depression <br />in the 1930s. The drop in occupancy, combined with a 22.5% decline in average daily rate (ADR) <br />resulted in a 51.8% drop in revenue per available room (RevPAR). Due to the lack of corporate <br />and group demand, higher-priced full-service and convention hotels suffered the greatest <br />declines in RevPAR during the year. Extended-stay and limited-service hotels operating in the <br />more modest-priced segments also experienced declines in performance, but to a lesser degree. <br />Inflation as measured by the Consumer Price Index (CPI) grew 1.2% in 2020. CBRE-EA expects <br />inflation to continue at a slow pace and ADR in 2021 will closely reflect real value changes rather <br />than nominal changes only. <br />The following chart illustrates the magnitude the COVID-19 pandemic has had on U.S. GDP <br />growth. As shown, CBRE is forecasting a ‘V’ shaped recovery. While there was a dramatic drop <br />in GDP in 2020, there is anticipated be a significant recovery during 2021 with a return to <br />normal by January of 2022 (we note before a full hotel recovery). <br /> <br />Economic activity bottomed out during April 2020 with 20.5 million jobs lost, sending the <br />unemployment rate to 14.7%. The large-scale shutdown of the economy caused an average of