STR: U.S. RevPAR down 80.3%; China's numbers improve

Though the continued impact of the COVID-19 pandemic drove U.S. hotel revenue per available room further down last week, mainland China—CBRE recently estimated the country is about seven weeks ahead of the U.S.—has shown early signs of performance recovery, according to STR.

In the fourth week of March, U.S. RevPAR fell 80.3 percent compared to March 24-30, 2019. The drop came as occupancy declined 67.5 percent to 22.6 percent and average daily rate dipped 39.4 percent to $79.92.

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“Year-over-year declines of this magnitude will unfortunately be the ‘new normal’ until the number of new COVID-19 cases slows significantly,” Jan Freitag, STR’s SVP of lodging insights, said in a statement. “Occupancy continues to fall to unprecedented lows, with more than 75 percent 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.”

Looking at aggregate data for just STR’s top 25 markets, occupancy, ADR and RevPAR fell 74.5 percent, 43.9 percent and 85.7 percent, respectively.

Of these markets, New Orleans experienced the steepest decline in RevPAR (-92.8 percent to $10.27). The drop came as the city saw the second-largest decreases in occupancy (-84.9 percent to 12.7 percent) and ADR (-52.3 percent to $80.74).

Oahu Island, Hawaii, recorded the steepest drop in occupancy (-86.4 percent to 10.5 percent) and Miami/Hialeah, Fla., saw the largest decline in ADR (-57.9 percent to $116.64). New York City and Seattle, two markets that have been particularly hard hit in recent weeks, saw occupancy decline 81.8 percent to 15.2 percent and 76.6 percent to 18.5 percent, respectively.

According to a recently updated forecast from STR and Tourism Economics, the two companies now predict the U.S. hotel industry will experience a 50.6 percent drop in RevPAR, a 42.6 decline in occupancy and 13.9 percent decrease in ADR in 2020.

China Shows Improvement

Though the problems caused by COVID-19 are unprecedented, China, as the first country to be hard hit by the pandemic, offers some insight into what a recovery may look like for other countries.

According to preliminary data from STR, mainland China has begun showing improvement with daily hotel occupancy reaching 31.8 percent on March 28, up from 7.4 percent during the first week of February.

“We’re seeing green shoots in hotel occupancy figures, but we must stress that these are only early signs of a recovery that is likely to develop slowly,” said Christine Liu, STR’s regional manager for North Asia, said in a statement. “Some of the demand stems from corporate travel, primarily within the same province, as well as small-scale meetings. Additionally, hotels are seeing business from those travelers quarantined after returning to China from other countries as well as those returning to cities for work. Overall, we’re seeing limited leisure business in city centers but a bit more recovery in that segment in surrounding suburbs.”

In Beijing, daily occupancy sat around 10 percent for most of the first week of March but climbed to 21.6 percent on March 28. Shanghai was as low as 11 percent on March 1 but reached 28.6 percent on March 28. Among the key STR-defined markets for mainland China, the highest absolute occupancy levels were seen in Xi’an (35.9 percent on March 28) and Chengdu (35.6 percent on March 28).

In Wuhan, the original epicenter of the pandemic, STR noted occupancy has taken a unique path. After falling as low as 7.5 percent on January 23, the metric reached a high of 72.7 percent on March 7 and has since decreased to 62.4 percent as of March 28.

“Wuhan saw an influx of hotel demand as medical workers entered the market, but some of that demand has tailed off as the situation becomes more stable,” Liu explained.

Though the data from China offers insight into what a recovery might look like in the U.S. Freitag warned last week the rebound here may take longer.

“U.S. hotel industry occupancy is not falling as quickly as it is in other countries, as it was in China, because there is not a national federal lockdown on the country,” Freitag said on March 26. “What that further then means is that there are still a lot of people traveling ... What that means also then is that there are still a lot of people who are not practicing social distancing, physical distancing. And what that implies then further, is that the uptick, the rebound will take us much, much longer as there are still so many more people who could get infected.”