Declining US Hotel Occupancy a Clear Sign of Leisure Season Reaching Its End

U.S. resort efficiency for the week ending Aug. 28 mirrored seasonal traits in addition to the continued impression of the pandemic on enterprise journey, and it’s too quickly to see any important results of Hurricane Ida amongst resort numbers in markets affected by the storm.

Occupancy fell by greater than two proportion factors to 61% for the week. This was the fifth consecutive week with decrease occupancy and the fourth straight week with an occupancy decline of greater than two proportion factors.

More than 77% of all STR-defined markets within the U.S. reported decrease weekly occupancy, and U.S. occupancy is now at its lowest stage since mid-May as simply 57% of inns noticed weekly occupancy above 60% — the bottom proportion in 14 weeks. Weekday and weekend occupancy have every been trending down for the previous 5 weeks.

On a total-room-inventory foundation (TRI), which accounts for quickly closed inns, weekly occupancy was 58.8%. In the U.S., there are nonetheless 49,000 rooms closed, 40% of that are in New York and Orlando.

At 23.6 million room nights, weekly room demand was the nation’s lowest since early June and 93% of what it was within the comparable week of 2019. At the identical time, the demand index to 2019 elevated 0.8 factors week on week as a result of of the shift within the Labor Day vacation, which started on the finish of the corresponding week in 2019. Daily demand indices confirmed a basic rise throughout all days, notably midweek, as 2019 enterprise and group journey slowed forward of the vacation.

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For the previous 12 weeks, room demand has been 90% or extra of the comparable 2019 stage. However, we count on it to melt additional as leisure journey pauses given the resumption of in-person colleges, elevated nervousness from the Delta variant surge and restricted enterprise journey.

Taking a nearer look, room demand fell essentially the most in Florida with Orlando and Miami accounting for greater than half of the state’s loss. Among different states, Louisiana’s room demand rose barely over the weekend forward of Hurricane Ida. Texas, Alabama and Georgia additionally noticed development over the weekend. STR will produce extra thorough evaluation on the Ida impression on efficiency and closures in future weeks. Overall, solely six states noticed demand develop week over week, led by Massachusetts. And whereas there may be noise as a result of Labor Day vacation shift, it’s price noting that 14 states nonetheless reported weekly demand better than what it was in 2019, down from 18 within the earlier week.

Next week’s knowledge is predicted to see wider market-level variations attributable to this 12 months’s Labor Day vacation together with the impacts of Hurricane Ida from Louisiana to the Northeast. While all notable key efficiency indicators are falling, we don’t count on a fall to the degrees seen earlier this 12 months. TSA screenings, whereas down from their leisure highs, proceed to be higher than 70% of the degrees they had been in 2019. Of course, solely time will inform.

Absolute common every day charge (ADR) was $132, a 10-week low and down 3% week on week, which was the biggest weekly lower since mid-April. Overall, ADR has are available decrease for 4 straight weeks, and when listed to 2019, the metric was down two factors to 103% — which means ADR was 3% greater than what it was within the comparable week of 2019. The lower within the index was the steepest of the previous two weeks.

Despite the autumn within the index, greater than 130 markets (78%) continued to report ADR that was greater than 2019 on a nominal foundation. The quantity of markets observing greater nominal ADR than in 2019 has proven little change over the previous 5 weeks. Eighty-eight markets reported actual ADR—adjusted for inflation—greater than what it was in 2019, down from 103 markets a week in the past. Overall, U.S. weekly actual ADR was at 98%, down two factors from the earlier week.

Revenue per accessible room (RevPAR) on a total-room-inventory foundation declined 7.2% week on week to $78, which was the biggest lower in 19 weeks and the bottom absolute total-room-inventory RevPAR in 12 weeks. Indexed to 2019, nominal total-room-inventory RevPAR was 92%, down 1.3 factors week on week and the second consecutive weekly lower. Real total-room-inventory RevPAR listed at 87%.

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On a 28-day transferring complete foundation, total-room-inventory RevPAR listed to 2019 dropped to 88% after coming in at 90% a week in the past however remained in STR’s “recovery” class because it was above 80. On a market-level, 100 markets had nominal total-room-inventory RevPAR at “peak,” which means it was above the extent seen within the comparable 2019 week. Every week in the past, 103 had been at “peak” ranges, which was essentially the most up to now. Seventeen markets remained in both “depression” — total-room-inventory RevPAR listed to 2019 below 50% — or “recession” — total-room-inventory RevPAR listed to 2019 between 50% and 80%. The remaining markets (49) had been in “recovery.”

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This article represents an interpretation of knowledge collected by CoStar’s hospitality analytics agency, STR. Please be at liberty to contact an editor with any questions or issues. For extra evaluation of STR knowledge, visit the data insights blog on STR.com.