Thursday, December 31, 2020

Hotels: Occupancy Rate Declined 33.0% Year-over-year, 2020 Worst Year on Record

by Calculated Risk on 12/31/2020 09:57:00 AM

This is the end of the worst year on record for hotel occupancy.   The average weekly occupancy rate was 44.2%, far below the occupancy rate for the previous worst year of 55.0% in 2009.  The normal annual average weekly occupancy rate is around 63%.

From HotelNewsNow.com: STR: US hotel results for week ending 26 December
U.S. weekly hotel occupancy fell to its lowest level since early May, according to STR‘s latest data for the week of Christmas.

20-26 December 2020 (percentage change from comparable week in 2019):

Occupancy: 32.5% (-33.0%)
• Average daily rate (ADR): US$92.08 (-28.8%)
• Revenue per available room (RevPAR): US$29.94 (-52.3%)
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 since the Great Depression for hotels - before 2020).

Seasonally we'd expect the occupancy rate to decline into the new year, and then, usually, business travel would start to pick up in the new year. 

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

Since there is a seasonal pattern to the occupancy rate - see graph above - 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:

This suggests no improvement over the last several months.

Week EndingYoY Change, Occupancy Rate
9/19-31.9%
9/26-31.5%
10/3-29.6%
10/10-29.2%
10/17-30.7%
10/24-31.7%
10/31-29.0%
11/7-35.9%
11/14-32.7%
11/21-32.6%
11/28-28.5%
12/5-37.9%
12/12-37.4%
12/19-26.4%
12/26-33.0%