Thursday, April 30, 2020

Hotels: Occupancy Rate Declined 62.2% Year-over-year

by Calculated Risk on 4/30/2020 01:32:00 PM

From HotelNewsNow.com: STR: US hotel results for week ending 25 April

Reflecting the continued impact 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 19-25 April 2020, according to data from STR.

In comparison with the week of 21-27 April 2019, the industry recorded the following:

Occupancy: -62.2% to 26.0%
• Average daily rate (ADR): -42.9% to US$73.61
• Revenue per available room (RevPAR): -78.4% to US$19.13

Year-over-year declines were less steep than previous weeks due to a comparison with the time of Passover in 2019. Additionally, absolute occupancy rose slightly from the levels of the previous two weeks (23.4% and 21.0%).

Demand has grown slightly across the country during the last two weeks, which could provide some hope that the levels seen in early April were indeed the bottom—especially with some states now moving to ease social distancing guidance,” said Jan Freitag, STR’s senior VP of lodging insights. “The 1.4 million additional room nights sold the last two weeks only represent around 100,000 new rooms occupied per night, but gains even that small are certainly better than further declines.

“Five states—California, Texas, New York, Florida and Georgia—represent 40% of that demand gain from the last two weeks. The list of hotel demand generators is long, but in general, it is not unreasonable to assume that part of the increased business is coming from essential workers, homeless housing initiatives and government-contracted guests.”
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.

Note: Y-axis doesn't start at zero to better show the seasonal change.