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Thursday, April 02, 2020

Hotels: Occupancy Rate Declined 67% Year-over-year to All Time Record Low

by Calculated Risk on 4/02/2020 11:29:00 AM

From STR: US hotel results for week ending 28 March

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 22-28 March 2020, according to data from STR.

In comparison with the week of 24-30 March 2019, the industry recorded the following:

Occupancy: -67.5% to 22.6%
• Average daily rate (ADR): -39.4% to US$79.92
• Revenue per available room (RevPAR): -80.3% to US$18.05

“Year-over-year declines of this magnitude will unfortunately be the ‘new normal’ until the number of new COVID-19 cases slows significantly,” said Jan Freitag, STR’s senior VP of lodging insights. “Occupancy continues to fall to unprecedented lows, with more than 75% of rooms empty around the nation last week. As projected in our U.S. forecast revision, 2020 will be the worst year on record for occupancy. We do, however, expect the industry to begin to recover once the economy reignites and travel resumes.”
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.  Note the graph is a 4-week average.