Fourth of July weekend to be telling for US recovery
 
Fourth of July weekend to be telling for US recovery
02 JULY 2020 10:02 AM

U.S. hotel industry performance continued an upswing during the week ending 27 June, but whether that recovery will continue or slow is likely to be evident soon, STR’s Jan Freitag said.

HENDERSONVILLE, Tennessee—The upcoming Fourth of July holiday weekend in the U.S. is being closely watched by industry analysts as an indicator of the recovery trajectory for the U.S. hotel industry.

Jan Freitag, SVP of lodging insights at STR, said results could “point to either a recovery or a slowing in the recovery,” depending in large part to the impact of a recent surge in COVID-19 cases amid the reopening of the economy. (STR is the parent company of Hotel News Now.)

U.S. hotel performance for the week ending 27 June was promising, with revenue per available room down “only” 56.5% year over year, Freitag said.

“This was the first time since March that RevPAR was better than -60%, so we continue to see our upswing in that metric,” he said.

More than half of U.S. hotel rooms were occupied for the weekend of 26-27 June.

“The occupancy by class continues to skew toward the lower end. Half the rooms were sold in midscale- and economy-class properties,” Freitag said.

Source: STR, © 2020 CoStar Realty Information, Inc.

“Also good to see is that the upper-upscale hotels, despite the complete lack of group demand, showed that 1 in 3 rooms was occupied,” he said.

Destination markets that have benefited from leisure drive-to demand continued to outperform others over the weekend, “a very strong indicator that leisure demand is very healthy across the U.S.,” he said.

Source: STR, © 2020 CoStar Realty Information, Inc.

The U.S. top 25 markets have also made considerable gains compared to “the trough,” when demand was at its lowest the week of 11 April, Freitag said.

Demand percent change for the top 25 was “positive often to the tune of 100%,” doubling compared to the week of 11 April, he said, noting this is not occupancy and does not take into consideration supply changes.

“There are very healthy indicators, but there are also indicators that give us pause, most notably the uptick in COVID-19 cases,” he said. “RevPAR numbers continue to get better. It’s going to be interesting to see if the uptick in COVID cases will actually make the RevPAR recovery stall out.”

Source: STR, © 2020 CoStar Realty Information, Inc.

Watch Freitag's weekly video below for more insights into U.S. hotel performance data:

Editor’s note: The video included in this article was filmed by Jan Freitag, SVP of lodging insights at STR, on 1 July and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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