Data shows clearly that the U.S. hotel market, as tough as it is right now, is among the best in the world. And if you want to understand why some countries are opening up to U.S. tourists despite the problems we have here at home, their hotel occupancy numbers may provide a clue.
According to STR data, the Americas is the region of the world that’s filling more rooms than nearly anywhere else.
- The North America subregion had a higher occupancy rate in June (41%) than any other subregion in the world besides Northeastern Asia (43%), and the U.S. (42.2%) had higher occupancy than Canada (24.7%) or Mexico (14.9%).
- Peru is a shining star with 48.3% of rooms filled last month, coming in second the world in reported occupancy. (Qatar is third at 48.1%)
- No country in Western Europe is at 30% occupancy while Israel stands out at 31.7%.
Marriott CEO Arne Sorenson talks about how the U.S. needs to be more like China to bring back the hotel business, but in China June hotel occupancy was just 46.9%, only a bit higher than in the U.S. Hotels in Beijing were just 33.4% full.
In effectively falling in line behind President Xi’s bid for a third term at the Twentieth Party Congress in late 2022, Sorenson seems to be missing the mark. (Not to mention that China shut down air travel out of Xinjiang on Friday amidst another outbreak they appear to be downplaying.)
Singapore occupancy for open hotels, on the other hand, was 74%. Praised early on for its handling of Covid-19, the virus swept through guest worker dormitories and is just behind Brazil in cases per capita (but with both a very young infected population and excellent health care, patient outcomes are very good). A large number of hotels have been closed with no tourism permitted and Singaporeans not even allowed staycations during the reporting period.
If you wonder why some resort destinations are opening to Americans, despite high Covid-19 cases here, hotel occupancy in the Maldives in June was 3% while in the Bahamas it was 13.3%. There’s speculation Bali could re-open even to Americans, hotels there were just 4.6% full in June. Turkey is open to the U.S. – its hotels were only 21.2% full.
Lockdowns are something that many countries just cannot afford to sustain, and that will lead to public health problems of their own, especially in poorer regions.
46% occupancy in Chinese hotels isn’t unusually low for the market. Many properties are massively overbuilt. When I worked in a 5-star hotel in Shanghai 30-40% occupancy was very typical outside of a few peak periods. Floors of the hotel were even closed off for months out of the year.
Are these occupancy rates for hotels that are OPEN or for all hotels in a market? If half the hotel rooms in a city are closed and the numbers represent occupancy rates at those that are OPEN then the numbers are deceptive.
Business travel is way down. I was booking hotels for the Seattle for the next weekend and the prices are low. Obviously, I am trying to stay outside downtown and Bonvoy properties are as low as $67/night. This weekend in Charleston, SC the prices are low for the summer season, perfect weather, and no lock down orders.
This echos much of what I saw in Vienna last week. I stayed at two different properties, one Hyatt and one LHW. Both told me they are running around 20% occupancy on good weeks. Even more striking is that this is during the usual peak summer tourism season when they are often at 90% (pre-covid). Europeans may be traveling to holiday destinations like Greece but they are clearly not going to the cities much. Vienna was all but empty. Americans in turn are being forced into traveling domestically as there is no other choice and based on this data it’s clearly benefiting domestic properties.
It would be interesting to see which type of property is showing the best occupancy here. My guess is that extended stay hotels are faring much better than large full service properties.
Red China always Lies. They will pad the numbers if it makes them look good and they will Hide the numbers if it makes them look bad.
Did I miss the link to the data?
I would like to check certain countries in greater detail.
Why would this surprise anyone? Using the phone and video conferences is much cheaper and often can provide the same service w/o the delay, inconvenience, expense of flying people out.
Most countries have travel restrictions, limited flights and a large number of people have zero interest in flying.
Lockdowns are painful but so is having a good portion of your population in the hospital. That gets expensive for the patient as well as insurers, hospitals, etc. For now since we were not prepared for it, you have to bite the bullet and take the short term pain in hopes of long term gains.
I’ve thought for a long term much of business travel was more about egos and status than anything else. There is a group of business people who love to travel because it gets them out of the office and away from family. And some have generous benefits while travel. Obviously not all. We had guys wasting time and money doing day trips to meet with contractors that could easily been done via phone/video since they were nothing more than meetings (no installation, hands on stuff needed).
Does anyone truly believe that Hawaii hotel occupancy rates will ever approach what they were pre-covid? As much as I feel for the locals this once in a lifetime pandemic will forever change the tourist landscape of Hawaii – regardless of what the experts say.
With so many pervasive economic and health unknowns that will plague Hawaii for a generation I foresee that it will become a destination for a select few. Lower end hotels will fade away with the international chains being the only groups that will survive long term. Why were building permits ever given to allow so many hotels in the Waikiki area? Short sighted lack of planning led to killing the goose that laid the golden eggs. This pandemic only served to bring it to everyone’s attention.
And I don’t believe that any combination of boutique business ventures for the islands will ever match the massive revenue streams of the tourist industry. Damn shame.
In NYC, hotels are converted to homeless shelters and temporary dormitories for visiting medical help. Hence, their occupancy percentage rates are higher. I don’t think there’s a shortage of medical staff in countries that have national healthcare programs, hence their hotels are not in full use. Perhaps the local authorities should contract hotels out for arriving passengers to quarantine at their properties?
Of course rates are higher in USA than Europe. Nobody from USA can visit Europe so people are taking summer vacations in USA instead. They miss our money but don’t want more COVID. Intra-Euro travelers can’t make up the deficit.
Gary,
Thanks for sharing these numbers and the analysis.
The trends over the next 12 months are worrisome, but the US occupancy rate at least is (as you point out) much better than literally everywhere else.
The Maldives numbers are deeply worrisome. In any case, given sea level rise at some point the discussion will be moot.