Thursday, March 26, 2020

Hotels: Occupancy Rate Declined 56% Year-over-year to All Time Record Low

by Calculated Risk on 3/26/2020 11:16:00 AM

From STR: US hotel results for week ending 21 March

Showing further effects of the COVID-19 pandemic, the U.S. hotel industry reported significant year-over-year declines in the three key performance metrics during the week of 15-21 March 2020, according to data from STR.

In comparison with the week of 17-23 March 2019, the industry recorded the following:

Occupancy: -56.4% to 30.3%
• Average daily rate (ADR): -30.2% to US$93.41
• Revenue per available room (RevPAR): -69.5% to US$28.32

“RevPAR decreases are at unprecedented levels—worse than those seen during 9/11 and the financial crisis,” said Jan Freitag, STR’s senior VP of lodging insights. “Seven of 10 rooms were empty around the country. That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further. With most events cancelled around the nation, group occupancy was down to one percent with a year-over-year RevPAR decline of 96.6%. The industry is no doubt facing a situation that will take a concerted effort by brands, owners and the government to overcome.”
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 was off to a solid start, however, COVID-19 has crushed hotel occupancy.

This is the lowest weekly occupancy on record, even considering seasonality, and STR expects occupancy rates to fall further.  Note the graph is a 4-week average.