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Thursday, July 30, 2020

Hotels: Occupancy Rate Declined 38% Year-over-year

by Calculated Risk on 7/30/2020 11:35:00 AM

From STR: US hotel results for week ending 25 July

U.S. hotel performance data for the week ending 25 July showed slightly higher occupancy and room rates from the previous week, according to STR.

19-25 July 2020 (percentage change from comparable week in 2019):

Occupancy: 48.1% (-37.9%)
• Average daily rate (ADR): US$99.24 (-27.3%)
• Revenue per available room (RevPAR): US$47.75 (-54.8%)

U.S. occupancy has risen week over week for 14 of the last 15 weeks, although growth in demand (room nights sold) has slowed.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

As STR noted, the occupancy rate has increased week-to-week in "14 of the last 15 weeks". The increases in occupancy have slowed and are well below the level for this week last year of 78%.

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).

Usually hotel occupancy starts to pick up seasonally in early June and decline towards the end of summer. So some of the recent pickup might be seasonal (summer travel).   Note that summer occupancy usually peaks at the end of July or in early August.

According to STR, the improvement appears related mostly to leisure travel as opposed to business travel.

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