New hotel occupancy and room rate data shows that things got even worse for hotels last week than they were the week before when hotels hit what was then their lowest occupancy rate – ever.
It seemed like things couldn’t get any worse, and then last week happened. Compared to the same week the prior year, March 29 – April 4 saw:
- Occupancy: down 68.5% to just 21.6%
- Average daily room rate: down 41.5% to $76.51
- Revenue per available room: down a whopping 81.6% to 16.50
The cheapest hotels had the highest occupancy. Interstate and suburban hotels did better than city center and resort properties. Each week will continue to suffer similar levels of decline compared to the prior year for several weeks.
Minneapolis/St. Paul, Minnesota-Wisconsin, posted the largest decline in ADR (-57.0% to US$68.23).
Of note, occupancy in New York, New York, was down 79.1% to 18.3%. In Seattle, Washington, occupancy dropped 73.3% to 19.5%.
The biggest drop in major market occupancy was on Oahu, where the year-over-year decline was 90.7%. Occupancy was down to 7%.
80,000 Marriott points used to get you a free night outside of peak season. Now it transfers title to the whole hotel.
How do these stats account for hotels that are closed? There are huge hotels near me including a major Marriott that are completely closed. Are those counted as vacant rooms with $0 revenue or excluded entirely?
@ Gary — More like several months? I mean, are you really planning on exposing your family to a hotel room (or airplane) anytime soon? No vaccine or very effective treatment = no travel for me + my SO.
I’m honestly shocked that occupancy is that high. Who is staying in hotels right now? I don’t think they’re overly dangerous if the room is cleaned every day, but really wondering what purpose someone would have for staying in a hotel (presumably in another city) instead of their home.
@Gene agreed!
I think some of those in hotel rooms are medical personnel. They don’t want to go home and risk infecting family or they may be working out of town and just need a place to crash.
In other cases it can be essential employees, maybe truck drivers needing a place to sleep.
I know around me several resorts are closed for the entire month (and maybe longer). And the hotels I walk near (in Scottsdale) are nearly empty.
And yeah, I’d have no interest in staying in a hotel anytime soon. It is impossible to really disinfect the rooms properly (too much time/cost). While the risk in actual percentage is low, why would I want to chance it and possible get sick away from home?
While I would love to take another trip to Europe soon, I can’t imagine that happening for at least a year and maybe longer. Sitting on a plane/airport for hours, in hotel rooms, trains, restaurants, etc. without a proven treatment/cure/vaccine just seems like a lot of risk.
Lufthansa said they don’t expect demand to return to normal for “years” and while I don’t trust Lufthansa much, I would agree with them here.
It is just the bloggers that seem overly optimistic. And we had bloggers who were dismissing the virus and still traveling even when they shouldn’t have and of course a few got sick.
I’m not overly paranoid (still going to work every day since I can’t do it from home) but at the same time, I don’t see a reason to take excessive risks. I was never a fan of cruises before and now you couldn’t pay me to go on one at any point in the future. Just a captive portal of germs and people who want to sit around all day eating/drinking and doing nothing.
With the overabundance of empty rooms, I think this is an excellent time for Marriott, Hilton and IHG properties to fumigate for bed bugs and pesky rodents.
@rich – I have tickets to Italy in August that I haven’t cancelled yet and if the travel restrictions are lifted I plan to go (along with my wife and daughter). I frankly doubt I’ll be able to go but I am one of those people you can’t imagine going to Europe for over a year.
Also, I just booked a web special award ticket on AA to Germany for November. I was planning to go mid-March but obviously that got canceled so am rebooking for later this year. The trip started mainly because I get a great fare on Singapore Air Premium Economy JFK-FRA but after researching Frankfurt (plus nearby day trips) I got excited about going and have rebooked. No Singapore Air this time but something IMHO better. Business Class DFW-FRA (787) and first both ways CLT-DFW for 84,000 miles and $138 in taxes. This is for a $4000+ ticket if I paid for it. Worst case I cancel and refund the miles. $200 fee to refund them and the $138 in taxes means I’m out a total of $338. That is a rounding error in my normal spend and well worth the risk to book business class for this price.
Those are the occupancy numbers that any hotelier in Bali would die for, Gary. Just spoke to the staff at a major American chain hotel in Sanur, Bali and she said only 3 of their 200 rooms are occupied. That translates to a very paltry 1.5% occupancy rate. And this is AFTER a large swath of hotels and resorts closed their doors temporarily for the next 2 months on April 1 therefore significantly reducing competition. This is just unprecedented and extremely trying times for a tourism reliant economy
I’m currently in BKK staying at the Athenee. Marriott has 20 hotels in BKK of various brands of which 11 are currently closed. Employees here tell me the Athenee is about 30% occupied.