STR: Markets see occupancy gains with eased COVID-19 restrictions

Boston
Boston posted the largest decline in ADR during the week of April 26-May 2, 2020. Photo credit: Getty Images

New research from STR shows that 13 STR-defined submarkets showed greater than 10-point weekend versus weekday occupancy gains for the week ending May 2, according STR.

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“The first ‘real weekend’ with eased COVID-19 restrictions showed an obvious jump in hotel demand, especially in popular, warm-weather leisure spots,” said Jan Freitag, STR’s senior VP of lodging insights. “Whether or not this becomes a trend remains to be seen, but the fact that there were people instantly willing to head out for leisure activity and stay in hotels is a positive sign for the industry. We have maintained throughout this pandemic that the leisure segment would be the first to return, it is just a matter of when.

“Hotel companies, together with the American Hotel & Lodging Association, are showing commitment to cleanliness and providing guests with a safe environment within their properties. At the same time, health experts have expressed concerns that increased leisure activity in public spaces could contribute to a potential second wave of COVID-19, which would obviously present added risk for the industry.”

Submarket

April 26-30 (Weekday)
Occupancy

1-2 May (Weekend)
Occupancy

Difference

Galveston & Texas City, Texas

26.1

57.0

30.9

Mobile, Ala. (Area)

20.1

47.8

27.7

Daytona Beach, Fla.

21.5

45.6

24.1

Corpus Christi, Texas

39.7

63.3

23.6

Panama City, Fla.

30.7

50.8

20.1

Myrtle Beach/North, S.C.

15.0

34.2

19.1

Fort Walton Beach, Fla.

18.6

37.0

18.4

Cedar City & St George, Utah

26.4

43.3

16.9

Pensacola, Fla.

35.5

50.2

14.7

Savannah Historic District, Ga.

13.7

28.0

14.3

Brownsville, Texas

43.2

55.3

12.1

Gatlinburg/Pigeon Forge, Tenn.

11.1

21.8

10.7

Prescott & Sedona, Ariz.

25.4

35.7

10.3

Source: STR

Overall, STR data for April 26-May 2, 2020 showed slightly higher U.S. hotel occupancy compared with previous weeks, but the same significant level of year-over-year decline in the three key performance metrics.

In comparison with the week of April 28-May 4, 2019, the industry recorded the following:

  • Occupancy: -58.5 percent to 28.6 percent
  • Average daily rate: -44 percent to US$74.72
  • Revenue per available room: -76.8 percent to US$21.39

Previous weekly U.S. absolute occupancy: 

  • April 19-25, 2020: 26 percent
  • April 12-18, 2020: 23.4 percent
  • April 5-11, 2020: 21 percent

“Week-to-week comparisons showed a third consecutive increase in room demand, which provides further hope that early April was the performance bottom,” said Jan Freitag, STR’s senior VP of lodging insights. “[Transportation Security Administration] checkpoint numbers, up for the second week in a row, aligned with this rise in hotel guest activity, which still remains incredibly low in the big picture. Overall, these last few weeks can be filed under the ‘less bad’ category. 

“At the same time, this past week was the first to show solid evidence of leisure demand as weekend occupancy grew in states that have significantly eased mitigation efforts. As we have noted throughout the pandemic, the leisure segment will be the first to show a demand bounce back. In weeks prior, the more reasonable conclusion was that hotels were selling mostly to essential worker types.”

Aggregate data for the top 25 markets showed larger year-over-year declines than the national averages: occupancy (-64.8 percent to 27 percent), ADR (-51.1 percent to US$81.28) and RevPAR (-82.8 percent to US$21.92). 

Among those top 25 markets, Oahu Island, Hawaii, experienced the largest drop in occupancy (-88.7 percent) and the only single-digit absolute occupancy level (9.7 percent). The decline in occupancy resulted in the steepest decrease in RevPAR (-93.5 percent to US$13.93). 

Boston posted the largest decline in ADR (-60.5 percent to US$90.01). 

Absolute occupancy in New York City was 44.9 percent, up from 41 percent the previous week. 

In Seattle, occupancy was 23.8 percent, up from 22.4 percent the week before.