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Market Analysis <br />28 <br /> <br />4.4 million job losses per month in the second quarter of 2020. An estimated two-year <br />employment recovery means roughly the same for lodging demand; however, recent employment <br />data shows encouraging growth in the overall economy. As of January 2021, the overall <br />unemployment rate was 6.4%. This is the ninth consecutive month of decreasing unemployment <br />rates. The trend is expected to continue and CBRE is anticipating the unemployment rate will be <br />4.8% by year-end 2021. <br /> <br />Baseline Forecast <br />According to Kalibri Labs, U.S. lodging demand fell by 51.8% in 2020 compared to 2019. While <br />the drop is dramatic, it is less severe than previously forecasted as a result of the stronger than <br />anticipated summer season. Overall occupancy finished the year at 41.7% compared to a prior <br />projected figure of 39.8% in the 2nd Quarter of 2020. <br />Unfortunately for U.S. hoteliers, ADR was worse than anticipated. The anticipated lack of <br />commercial and group demand during the fall of 2020 limited the revenue generated by hotels <br />in the higher-priced chain scale segments. In turn, this served to lessen the average growth in <br />room rates. CBRE Hotels previously forecast a decrease of -20.4% in August of 2020. The actual <br />decrease for the year was -22.5%. <br />For 2021, CBRE Hotels anticipates sluggish lodging performance in the first half of the year, <br />followed by significant improvement during the second half. The continued rollout of COVID-19 <br />vaccines, combined with the economic benefits of a second stimulus package, both boost our <br />projections of lodging demand during the third and fourth quarters. On average, occupancy <br />during the second half of 2021 is forecast to be 1,200 basis points (12%) greater than the first <br />half of 2021.