Article Summary:

Two of California’s biggest and deadliest wildfires in 2018 caused spikes in hotel demand from displaced residents, firefighters and other aid workers.

Primary Category: Research

Secondary Categories: Americas, Data Dashboard, News

BROOMFIELD, Colorado—2018 has been an above-average year for California wildfires with 876,225 acres burned year to date through 2 December, which is more than triple the five-year average of 232,469 acres burned over the same time period.

Just two fires last month, the Camp Fire and the Woolsey Fire, totaled more than 250,000 acres burned. These fires were located in very different hotel markets in California, yet both regions saw a lift in demand and average daily rate around the fire perimeters.

Key Points:

  • In Butte County and surrounding counties, demand increased 46% on average for the duration of the Camp Fire, reaching a 120% increase on the day of highest impact.
  • The hotel performance impact of the Woolsey Fire was widespread for the first week of the fires, but became more concentrated in the Oxnard/Ventura, California, tract during the second week. The average demand increase for the region was 7.9% over the duration of the fire.
  • The performance impact was stronger in the areas around the Camp Fire than around the Woolsey Fire. The counties surrounding the Camp Fire contain significantly fewer hotel rooms, with a higher concentration of rooms in the economy and midscale classes.

To see the demand impact of the two fires by county, use the interactive map below.

The Camp Fire
The Camp Fire originated in Butte County outside of Oroville, California, on 8 November. By the next day, the fire had consumed 90,000 acres, and by 25 November, the day of 100% containment, the fire had burned more than 153,000 acres. The fire was responsible for 85 civilian fatalities, with 18,793 structures destroyed.

Unsurprisingly, with such a destructive natural disaster, the impact on the hotel industry in the area was significant. Both Butte County and the surrounding counties of Glenn, Colusa, Plumas, Sutter, Tehama, and Yuba saw significant demand growth over the same time last year. With evacuation orders in place across the region and more than 5,500 fire personnel working to contain the fire at the peak of the containment efforts, the demand was likely a combination of evacuated residents, fire personnel, and other aid and relief workers.

Low hotel supply in the region and the timing of the fire contributed to high demand growth. Mid-November is not typically an extremely busy time for the area. During the same period last year, Butte County had an occupancy of 59.7%, while the surrounding counties had an occupancy of 57.2%. From 7 November through 27 November 2018, Butte County saw a 43% increase in demand, growing occupancy to 85.6%. The surrounding counties saw a similar increase in demand of 48%, resulting in an occupancy of 86.1%. The peak growth in demand for the area was seen on the Sunday after Thanksgiving (25 November), typically a very low demand day and the lowest occupancy day of the month in 2017 at only 36%.

ADR growth in the area was much less significant than the demand lift over the same time period, although Butte County still saw a 3.6% increase and the surrounding counties saw a 9% increase. In absolute ADR, Butte County averaged $102.49 over the two and a half weeks, and the surrounding counties had an ADR of $93.25. The days of peak ADR growth coincide with the strongest demand-growth days, from 18 November to 20 November and again on 25 November.

The Woolsey Fire
The Woolsey Fire started on 8 November in Simi Valley, California. By 11 November, the fire had spread to 85,500 acres, forcing evacuations across Los Angeles and Ventura counties of more than 265,000 people. By the time the fire was fully contained on 21 November, it had burned nearly 97,000 acres, destroyed 1,500 structures and caused three fatalities.

Hotels in the region saw their peak demand and ADR growth on 11 November, coinciding with the evacuations as the fire spread to areas such as Malibu and Thousand Oaks. The hotel performance impact in the first week of the fires was more widespread across the region, while the performance impact during the second week of the fires was concentrated in the Oxnard/Ventura, California, tract.

The Oxnard/Ventura tract saw the greatest impact on both demand and ADR. Over the approximately two weeks of the fire, Oxnard/Ventura saw a 12.4% demand increase and an 8% ADR increase. Over the same period, the surrounding tracts of Hollywood/Beverly Hills, Los Angeles North, and Santa Monica/Marina Del Rey experienced 6.8% demand growth and 6.6% ADR growth.

Supply summary
The Camp Fire was more destructive overall than the Woolsey Fire, with a greater acreage burned, more structures destroyed and a higher fatality count. The impact on the hotel industry was also more significant as a result of the Camp Fire, but the hotel supply dynamics in the affected regions likely contributed to the performance impact.

The major difference is the total supply available to accommodate the demand generated by the wildfires. In Butte and the surrounding counties, there were 4,810 rooms available across 94 hotels. A total of 75% of that supply is classified as Midscale or Economy, which may be more likely to accommodate the disaster-related demand. In contrast, the Oxnard/Ventura tract and the surrounding tracts contain 40,950 rooms across 420 hotels. Only 28% of this supply is classified in the Midscale or Economy segments, with over 45% of the supply classified as Upper Upscale or Luxury.

There has been no hotel supply loss as a result of the damage from the Camp and Woolsey fires.

This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.

1 Comment

  • Carl Ribaudo December 11, 2018 10:50 AM Reply

    It’s doubtful this growth can be sustained as once these first responders go home the destination is left with a severely damaged brand. Consumer interest is fickle and will move elsewhere with plenty of options in California. It will take a while to regenerate demand and in the unique case of Paradise perhaps a generation.

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