The effect from the coronavirus continues to have stunning impact on the hotel industry in the US and around the world.
Here are some meaningful comments and statistics, provided by Smith Travel Research (STR):
“RevPAR decreases are at unprecedented levels—worse than those seen during 9/11 and the financial crisis,” said Jan Freitag, STR’s senior VP of lodging insights, on a recent webinar shared with the hospitality industry.
“Seven of 10 rooms were empty around the country. That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further. With most events canceled around the nation, group occupancy was down to one percent with a year-over-year RevPAR decline of 96.6%. The industry is no doubt facing a situation that will take a concerted effort by brands, owners and the government to overcome,” Freitag said.
Aggregate data for the Top 25 Markets showed steeper declines across the metrics: occupancy (-66.3% to 26.2%), ADR (-35.2% to US$105.40) and RevPAR (-78.2% to US$27.59).
- San Francisco/San Mateo, California, recorded the worst declines in each of the three key performance metrics: occupancy (-80.7% to 16.6%), ADR (-44.7% to US$151.25) and RevPAR (-89.3% to US$25.08).
- New York, New York’s drop in RevPAR (-86.5% to US$26.98) was due primarily to the second-steepest decrease in occupancy (-80.5% to 16.8%).
- New Orleans, Louisiana, matched for the second-largest decline in RevPAR (-86.5% to US$20.02), mostly because of the third-largest decrease in occupancy (-76.0% to 20.2%).
Over 3.28 million people in the U.S. applied for unemployment benefits for the week ending March 21st, 2020. That surpasses the previous record almost 5 fold of 695,000, set in October 1982.
The Wall Street Journal has reported that Keith Hall, former director of the Congressional Budget Office and adviser to President George W. Bush, said the jobless rate could approach 20% over the next few months, an unemployment level economists believe occurred during the Great Depression. “That is well above the post-World War II record high of 10.8% at the end of the 1981-82 recession,” the article states.
These are grim times for the service industry and our economy as a whole. We will continue to monitor the statistics reported by Smith Travel Research (STR) as well as other meaningful information on the state of the hotel and service industry in the weeks to come.