Saturday, November 07, 2020

Hotels: Occupancy Rate Declined 29% Year-over-year

by Calculated Risk on 11/07/2020 10:43:00 AM

From STR: US hotel results for week ending 31 October

U.S. weekly hotel occupancy was the lowest for any week since late June, according to the latest data from STR through 31 October.

25-31 October 2020 (percentage change from comparable week in 2019):

Occupancy: 44.4% (-29.0%)
• Average daily rate (ADR): US$91.56 (-27.4%)
• Revenue per available room (RevPAR): US$40.70 (-48.4%)

With rising COVID-19 case numbers and less leisure travel, the U.S. saw a second consecutive week with fewer hotel guests. During October 25-31, room demand fell 1.3 million from the prior week, leading to the country’s lowest occupancy level (44.4%) since the week of June 14-20.
emphasis added
Since there is a seasonal pattern to the occupancy rate - see graph below - we can track the year-over-year change in occupancy to look for any improvement. This table shows the year-over-year change since the week ending Sept 19, 2020:

Week EndingYoY Change, Occupancy Rate

This suggests little improvement over the last 7 weeks, but not as bad as "lowest since June" would suggest.  Some of the recent decline in the occupancy rate is just seasonal.

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 since the Great Depression for hotels - before 2020).

Seasonally we'd expect the occupancy rate to decline into the new year. Note that there was little pickup in business travel that usually happens in the Fall.

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