Brazil Hotels Recovering ADR Much Faster Than Occupancy – STR

After a difficult winter, Brazil’s hotel occupancy is once again on the rise, reaching 44% in August 2021, or about 74% of the 2019 comparable. While occupancy recovery has been slow, the country’s rebound in average daily rate (ADR) has been strong, with monthly rates even exceeding 2019 levels earlier this year. August ADR reached BRL295.05, which was just 3.4% below 2019, as shifts in demand and supply have helped drive impressive ADR performance.

Domestic demand

With international travel difficult at best, impossible at worst, Brazil’s hoteliers have relied almost entirely on domestic demand. This has led to strong performance in popular domestic vacation destinations outside of the country’s major markets.

While domestic destinations should anticipate continued strong performance in the short-term, it is likely that ADR will soften over time as international outbound travel resumes. Attracting international arrivals will help to offset the loss of domestic demand when that happens.

Temporary closures

Temporary hotel closures have also played a role in strengthening rates this year. Midscale and Economy class hotels continue to show the highest temporary closure rates, which has played a role in pushing the country’s 2021 ADR in comparison with 2019.

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