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Sunday, February 09, 2020

Hotels: Occupancy Rate Increases Year-over-year, Concerns about 2019-nCoV

by Calculated Risk on 2/09/2020 12:40:00 PM

From STR: US hotel results for week ending 1 February

The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 26 January through 1 February 2020, according to data from STR.

In comparison with the week of 27 January through 2 February 2019, the industry recorded the following:

Occupancy: +1.7% to 57.6%
• Average daily rate (ADR): +2.2% to US$127.94
• Revenue per available room (RevPAR): +4.0% to US$73.73
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 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

2020 is off to a solid start, however, STR notes that the new coronavirus could have a significant negative impact on hotels:
As fears over an outbreak of the new coronavirus centered in Wuhan, China, continue to restrict travel, visits to the U.S. from China could drop by 25% in 2020, according to analysis by Tourism Economics.

Speaking on a webinar Thursday titled “U.S. economy and hotel industry 2020 outlook: Navigating the slowdown,” Adam Sacks, president of Tourism Economics, said a 25% drop in Chinese visitors to the U.S. means a loss of 4 million hotel roomnights and $5.8 billion in visitor spending in 2020, and ultimately 7.8 million roomnights and $10.3 billion in spending through 2024.
This analysis was based on historical data from SARS. Based on more recent data, it appears the new coronavirus will have a larger impact than SARS.

Seasonally, the 4-week average of the occupancy rate will increase over the next several months.

Data Source: STR, Courtesy of