HENDERSONVILLE, Tennessee—While memories of 9/11 will also by characterized by personal accounts and experiences, a look back at U.S. hotel performance data provides an equally sobering perspective.
1 January – 9 September
It’s worth noting, said STR’s Jan Freitag, that room demand already had started to decline prior to 9/11.
Indeed, year-over-year demand fell 1.3% during April 2001, a hiccup that kicked off 12 consecutive months of demand declines, according to data from STR, parent company of HotelNewsNow.com.
The decline in occupancy actually began a few months prior, with a 1.2% drop to 59.8% during February.
By August, the month before the terrorist attacks, U.S. hotel occupancy declined 3.4% to 67.7%; average daily rate was down 1% to US$84.27; and revenue per available room dropped 4.4% to US$57.08.
“The 9/11 terror attacks really amplified a downturn that was already coming,” said Freitag, who serves as senior VP of global development for the Hendersonville, Tennessee-based research company.
The day prior to the attacks, year-over-year U.S. hotel occupancy was down 5.5% to 64%; ADR fell 1.1% to US$87.97; and RevPAR declined 6.6% to US$56.28. The industry sold 2,774,396 roomnights.
In New York City, occupancy was 87.6%, ADR was US$218.52, and RevPAR was US$191.49.
While the U.S. hotel industry experienced a noticeable hiccup the day planes crashed into Towers One and Two of the World Trade Center, the Pentagon and a field in Stonycreek Township, Pennsylvania, the shockwaves were not fully realized until the days after.
On 11 September, the U.S. hotel industry’s year-over-year occupancy was down 11.5% to 64.6%; its ADR dropped 3.1% to US$86.27, and its RevPAR declined 14.3% to US$55.74. Demand was down 9.6% to 2,802,069 roomnights sold.
In New York City, year-over-year occupancy dropped only 7.7% to 89.6%. Declines in ADR and RevPAR were more pronounced at 11.2% and 18%, respectively.
12 – 17 September
In the week following the attacks, hotel fundamentals went into a tailspin. The total U.S. industry saw year-over-year RevPAR bottoming out at US$25.79 after a 42.2% decline on 16 September.
By Monday, occupancy was hovering just above 45% and ADR was US$70.33. The same day, demand was down 29.8% year over year with 1,985,737 roomnights sold.
Demand in New York City was down even further, with a decline of 44.6%. The other key metrics followed suit, with occupancy down 44.9% to 50%, ADR down 34.4% to US$161.54, and RevPAR down a whopping 63.9% to US$80.80.
September 2001 has the dubious honor as the month with the largest decreases in occupancy (-16.2%), RevPAR (-23.2%) and demand (-14.4%) since STR began collecting data more than 25 years ago.
The same is true for New York City, where occupancy fell 27.5%, RevPAR dropped 42.4%, and demand decreased 27%.
The most notable aftereffect of 9/11 was demonstrated with pricing. It took the U.S. hotel industry seven years to grow rate back to where it should have been had it merely kept pace with inflation, according to data at STR.
The depressed pricing environment also allowed online travel agencies to get their foot in the door—the ramifications of which the industry has been dealing with ever since.
The 9/11 attacks combined with a downturn in the general economy and in the general travel economy “helped the OTAs sell rooms through that third channel,” STR’s Freitag said. “It really helped the OTAs come to the forefront and say, ‘Hoteliers, here’s one other way to sell your hotel rooms that you didn’t have before.’”
Year-end 2001 ADR for the U.S. hotel industry was down 1.2% to US$83.62. RevPAR declined 6.7% to US$49.91.
“The larger impact was probably psychological, this idea of traveling, flying to places,” Freitag said. “Suddenly it got a lot more—people thought about traveling suddenly as being not as safe as it used to be.”
Through July 2011, the U.S. hotel industry’s occupancy was up 4.6% to 60.7%, its ADR had risen 3.5% to US$100.96, and its RevPAR increased 8.2% to US$61.33. Demand through July was up 5.4% year over year.