Monday, September 17, 2018

Hotels: Occupancy Rate Declines Year-over-year

by Bill McBride on 9/17/2018 12:49:00 PM

From HotelNewsNow.com: STR: US hotel results for week ending 8 September

The U.S. hotel industry reported mostly negative year-over-year results in the three key performance metrics during the week of 2-8 September 2018, according to data from STR.

In comparison with the week of 3-9 September 2017, the industry recorded the following:

Occupancy: -3.5% to 61.7%
• Average daily rate (ADR): +1.0% to US$121.95
• Revenue per available room (RevPAR): -2.4% to US$75.25

STR analysts note that performance percentage changes in several major markets were significantly affected by the comparison with the post-Hurricane Harvey and pre-Hurricane Irma time period in 2017.

Houston, Texas, reported the steepest decreases in each of the three key performance metrics: occupancy (-42.2% to 50.0%), ADR (-19.6% to US$90.73) and RevPAR (-53.6% to US$45.36). Houston’s hotel performance was lifted in the weeks and months that followed Hurricane Harvey in 2017 as properties filled with displaced residents, relief workers, insurance adjustors, media members, etc.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Hotel Occupancy RateClick on graph for larger image.

The red line is for 2018, dash light blue is 2017, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

The occupancy rate, to date, is just ahead of the record year in 2017.

Note: 2017 finished strong due to the impact of the hurricanes.   There will be some boost to hotel occupancy in the Carolina region following hurricane Florence, but I expect the overall occupancy to be lower in 2018 than in 2017.

Data Source: STR, Courtesy of HotelNewsNow.com