Data Shows Just How Empty And Cheap Hotels Are Right Now

For the week ending March 21, U.S. hotel occupancy fell to its lowest level ever recorded. Occupancy fell by 56% and average room rates fell 30%. Group (event) occupancy was down to 1%. And occupancy rates are likely even lower right now – we’ll just have to wait about a week to learn just how low.

  • Occupancy: 30.3%
  • Average daily room rate: $93.41
  • Revenue per available room: $28.32

Declines were even greater in the top 25 markets, with occupancy 26.2% and rates dropping more than a third. In both San Francisco and New York only 17% of rooms were filled.

In February the U.S. unemployment rate stood at 3.5%. On March 6 I called a recession. Today we learned that there were 3.28 million new unemployment claims last week, five times the previous record, and “17 times higher than the previous record one-week jump.”

Many economists believe the downturn will be short-lived, because outside of an enforced lockdown (that has extended beyond travel to retail and public gatherings) there isn’t anything fundamentally wrong with the economy. In addition there’s both monetary and fiscal policy working to inflate things (though those actions may come with costs later).

My own view is that the recession in travel will be long-lasting. Restrictions are likely to remain in place on international travel, and we may see some restrictions in place domestically even as broad warnings lift. There will less discretionary income to travel, and businesses taking time to recover before sending employees back onto the road. However once we’re able to travel there will be plenty of empty rooms and low prices to lure people back.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Don’t expect a bounce back, ever.

    Why ? Because business will finally discover that technology works over distance and they don’t need the costs of travel.

    The game is over for many.

  2. @ Talay, that’s what they say every recession. Turns out personal interactions help you close deals. Companies may be more likely to cut non-essential travel.

  3. So I have been doing Marriott mattress runs taking advantage of the low room rates. As a Plat, I have only been getting 25% of my stays upgraded in hotels that have 3 cars in the parking lot. 🙁

  4. After getting fleeced for $37/night resort fees at MGM Resorts in Vegas just last month, it will be interesting to see if MGM changes their tune IF they re-open.

    Just like alot of people are firing United right now, it’s not going to be in this lifetime, that you find me at an MGM resort.

    I am very interested to see how the anti-customer policies adjust with the changing demand profile. I feel sorry for the furloughed employees, but I could care less about the corporate overlords.

  5. @Talay agreed.

    @ABC What happened in prior recessions isn’t relevant. Technology has advanced soo much since the last recession. There will be some business travel but nowhere near the levels of what it was before for many businesses.

  6. @ABC Your super wrong. I get maybe for older people that made sense but I’m 29 and everyone within 7 years of me on both sides is much more technologically inclined. We face time more often, we group chat. I run an online business with Virtual Assistants and I have programs to manage them and their time effectively without having to leave my house. I can literally assign tasks, time them and measure their efficiency from across the world. In time more companies will adopt this.

    Plus our generation values our time more than just working meaning people will be much more likely to want to telecommute then leave their families for days and deal with airports.

    I think in time we’ll see an entire shift in how we work. Working from home/remotely will be a benefit not a hindrance.

    Wether you older people like it or not, people under 40 run the economy and we like tech. In 10 years most baby boomers will have passed away. That generational wealth will have transferred billions of dollars and our generation will want to use it in more technologically savy ways (like using tech to work from home)

  7. Travel is and almost always has been elective, with purpose. We like to travel, for many reasons.
    And if it were safe to do so now we would be travelling. For business and for leisure.
    When it is safe to do so again, we will resume traveling.
    Those who don’t want to travel will continue to be able to avoid it 🙂 (We’ve had technologies since the early 2000s that allow telecommuting).

    Hopefully, as consumers, companies and brands will increase their empathy, and realize that we need each other now and more, in the future.
    As consumers, we will surely vote with our $, rewarding the brands that win our trust, deserve our $.

  8. I think @ABC is correct. My father was a traveling salesman (and a United 100,000 miler in the ‘50’s when that got you club membership). He understood the psychology of selling (not just taking orders) and always told me, “It’s much harder for a customer to say ‘No’ to your face.”

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