Data shows things are getting better for US hotels
 
Data shows things are getting better for US hotels
08 MAY 2020 7:44 AM

Jan Freitag offered insights into weekly, monthly and quarterly performance data for U.S. hotels as the impact of the pandemic begins to come into focus.

HENDERSONVILLE, Tennessee—While the U.S. hotel industry is still seeing year-over-year declines across the three key performance metrics because of the COVID-19 pandemic, the data is starting to get better, according to Jan Freitag, SVP of lodging insights at STR. (STR is the parent company if Hotel News Now.)

For the week ending 2 May, occupancy dropped 58.5% year-over-year to 28.6%, which was “materially higher” than the previous week, Freitag said.

Revenue per available room also didn’t fall as much this week.

“The U.S. RevPAR decline last week was ‘only’ 76.8%,” he said. “This is the third week that the data has been better than -80%, and we fully expect with social distancing and stay-at-home orders expiring, that we will see RevPAR declines that are getting step by step better.”

He added that the week ending 11 April saw the steepest RevPAR decline of 83.6% when looking at the data historically.

“The data has gotten better since then, (and) we fully expect it to recover further,” he said.

Roomnights
The room demand number is also improving slightly, Freitag said.

“Last week, the total number of rooms sold was almost 10 million roomnights. That number is actually 1 million roomnights better than for the week ending 25 April,” he said. “And in addition, the TSA tells us that the number of people who went through their checkpoint actually also increased, only slightly, but now stands at just under 1 million.”

Lower-end performing better
Hotels at the lower end of the chain scales have been performing better throughout the pandemic, Freitag said.

“Looking at the class performance, the data is clear, and it’s not as bad as it used to be. Of course the lower end of the classes continues to outperform … showing better occupancy declines and (average daily rate) declines than the upper end of the market where RevPAR still is down -90% from the same week in the prior year,” he said. “When we look at this historically, it again seems to be true that for the week of 11 April that the drop was reached, and we are now showing, week by week, slightly better performance than in the prior week.”

The economy class has reached an absolute occupancy level of 41%, and while lower-tier hotels are performing better, “it’s heartening to see that the upper end of the market, luxury and upper-upscale hotels, are now (reporting) double-digit occupancies as well,” he said.

Extended-stay hotels are also seeing better performance than other segments, and the branded lower-end extended-stay properties have reached occupancy of 57%, Freitag said.

“It’s not the 73% that it used to be, but it certainly is better than most other sectors we’re reporting on,” he said.

China
China was where the U.S. is now six weeks ago but is now seeing occupancy improve, “last week standing at just under 38%,” Freitag said.

“It will be interesting to see if the easing of travel restrictions in China will continue to boost their occupancy and if China is a bellwether of things to come for the U.S., and we’re going to see continued increases in occupancy in the U.S. as well,” he said.

Editor’s note: The video included in this article was filmed by Jan Freitag, SVP of lodging insights at STR, on 6 May and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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