The Azucena Take: Summer Vacation and the Commercial Real Estate Market

One of the best indicators that life is returning to normal is the recent surge in the tourist industry. Every aspect of the leisure and travel industry took one of the biggest hits in 2020. While still early in the season, most of the industry is on par to return to pre-pandemic numbers.

Vacation destinations (like Las Vegas) are already seeing a spike in activity compared to last year. The same trend could also be seen in popular hot spots that are not too dependent on the tourist industry (like Los Angeles and Seattle). Even though tourism may not be a major part of the economy, it does help the overall economy.

Hotel occupancy is also returning to normal with the possibility of a return to pre-pandemic numbers. The average hotel occupancy rate in July has been above 70% but tanked in 2020 because of the pandemic. While still early, June saw the average hotel occupancy at 68% (meaning we could see a +70% in July).

Airlines have also seen a resurgence as there were an estimated 2 million air travelers a day in June. It’s a major jump compared to March with all indicators pointing to the possibility it will continue to rise in July.

For commercial real estate investors, the summer season is what they should have been planning for in early 2021. Hotels are already being booked up in vacation destinations and tourist hotspots. An influx of tourists also means a boom for retail and restaurants.

Those who waited on the sidelines are now getting a sample of what to expect in the coming months. Don’t get upset that you missed this opportunity, instead start planning for 2022.