Saturday, April 25, 2020

Hotels: Occupancy Rate Declined 64.4% Year-over-year; 4-Week Average at All Time Record Low

by Calculated Risk on 4/25/2020 10:39:00 AM

From STR: US hotel results for week ending 18 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 12-18 April 2020, according to data from STR.

In comparison with the week of 14-20 April 2019, the industry recorded the following:

Occupancy: -64.4% to 23.4%
• Average daily rate (ADR): -42.2% to US$74.53
• Revenue per available room (RevPAR): -79.4% to US$17.43

“Absolute occupancy and ADR were actually up slightly from the previous week, but it is important to state that this is not any type of early-recovery sign,” said Jan Freitag, STR’s senior VP of lodging insights. “Rather, more demand can be attributed to frontline workers. A perfect example, the most notable occupancy level (33.3%) came in the New York City market, which has welcomed an influx of workers from the medical community.”
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.

This is the lowest 4-weekly average occupancy on record, even considering seasonality.  It appears that around 20% occupancy could be the bottom.