The continued spread of Covid-19 across the United States coupled with increasing travel and meeting restrictions by government agencies is severely hurting the U.S. hotel industry. All three key hotel performance indicators for the week ending March 14, 2020, were down by double-digit percentages compared with the week of March 10-16, 2019, according to STR.
Revenue per available room plunged 32.5 percent, to $63.74. That compares with a year-over-year decline of 11.6 percent for the prior week. Occupancy dropped 24.4 percent to 53 percent. Average daily rate was down 10.7 percent to $120.30.
"To no surprise, the hurt continued and intensified for hotels around the country," said STR's SVP of lodging insights Jan Freitag. "The performance declines were especially pronounced in hotels that cater to meetings and group business, which is a reflection of the latest batch of event cancellations and government guidance to restrict the size of gatherings."
Total U.S. group occupancy for the week was 10.7 percent, down 56.6 percent year over year. The prior week, ending March 7, total U.S. group occupancy was 21.3 percent, down 16.7 percent compared with the year prior. STR uses the aggregate of the luxury and upper upscale classes only for the total U.S. group occupancy figures, as those are the segments with the most meetings properties.
For the convention segment for the week ending March 14, group occupancy was at 13.4 percent, a figure representing not only a 57 percent decline from the prior year, but also showing how quickly 2020 group demand has dried up, especially when compared to the previous week, when occupancy was at 32.8 percent, a 17.1 decline from the prior year.
Among the top 25 markets for overall hotel performance, Seattle saw the steepest year-over-year declines in occupancy (55 percent), ADR (24.7 percent) and RevPAR (66.1 percent). San Francisco/San Mateo posted the week's second-largest drop in RevPAR (63.3 percent) due to the second-steepest decreases in occupancy (51.6 percent) and ADR (24.2 percent). New York City had the third-largest declines in occupancy (43.9 percent) and RevPAR (54.6 percent) while New Orleans had the third-steepest drop in ADR (22.8 percent).
During a webinar Monday evening regarding the data for the week ending March 7, Freitag's comments were prophetic, at least for this week. "We registered RevPAR declines across all classes, all chain scales, across all location types," he said. "Looking at data from other countries, we can safely say that this was the first bad week in a string of bad weeks. By bad, we mean we expect double-digit RevPAR declines for the foreseeable future."