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US hotel closure analysis
March 20 2013

An analysis of more than 7,900 closed properties reveals interesting trends regarding age, chain scale, brand affiliation and more.

  • Most closures represented independents, with economy properties a distant second.
  • Nearly 13% of all the closures were for properties 10 years old or younger.
  • The plurality of closed hotels only ever had one brand name (or remained independent) during their lifecycles.
By Carter Wilson
Director, STR Analytics

BOULDER, Colorado—A few years ago STR Analytics did an analysis of U.S. hotel closures and the demographics that encapsulate this group of properties. Since then, the STR census database recorded an additional 1,400 hotel closures, a significant enough number to warrant updating the analysis.

In this current analysis, we were able to compile data on more than 7,900 closed properties. The basic stats include:

  • 7,919 hotels from all 50 states;
  • 632,384 rooms;
  • average room count: 80;
  • more than 45 brands represented as of the date of closing; and
  • average life span: 34 years.

It should be noted that complete census information was not available for every property, so the following charts reflect the results only from properties containing that particular data field.

Digging into the numbers reveals some interesting highlights:

(Note, the pre-2011 chain scale classifications were used, since most hotels closed prior to this point and thus were never classified under the new scale system).

As one might expect, most of the closures represented independents, with economy properties a distant second. Very few closures came at the high end of the spectrum.

This one is a bit surprising. Nearly 13% of all the closures were for properties 10 years old or younger. Clearly some properties were victims of natural disasters (Hurricane Katrina, Superstorm Sandy, etc.), but that's still a pretty big number. For the properties that closed when they were 10 years old or younger, most of the closures occurred during 2004 and 2005.

Geographically speaking, the largest amount of closures occurred in the Southeast (speaking of Katrina and hurricanes...). The often-humid climate in that area also lends itself to mold, which could be the culprit for some of the properties that closed.


Most closures happened in suburban or small metro locations. In terms of property size and price tier, most of the closures represented small (20- to-50-room) budget properties, most of which were independents (aka “mom and pop”-type establishments).

One could surmise a lot of these were single-ownership family ventures, where perhaps the owners decided to sell (or were foreclosed upon) and the property was worth more as an adaptive reuse rather than as a going concern.

Here's another surprising one:

The plurality of closed hotels only ever had one brand name (or remained independent) during their lifecycles. Several had two, but beyond that the numbers dwindle. (It would be interesting to know the stories behind the handful of hotels that went through seven names).

We would have guessed that two names would have been the majority of the cases, thinking that if one brand wasn't working, a property owner would have tried another brand or switched to independent. But that assumption is predicated on a second assumption that a closed property means it failed, which certainly doesn't have to be the case. Many properties that close still make debt services, but if the land is worth more with another use on it, market forces will push for an adaptive reuse. Ninety-four percent of the properties that had only one affiliation and then closed were independent hotels.

Finally, we looked at when these properties closed. We focused on the period from 1985 to the present, as this represents more than 90% of the closures.

Click chart to enlarge.

There was a big spike in 2005. Again, it's easy to blame Hurricane Katrina here, but only a quarter of the properties that closed that year were located in the South Atlantic region. And the number of closures had been steadily creeping up before that point, anyway. If you take a look at (seasonally-adjusted) revenue per available room from 2000 to 2005, it was almost unchanged. Yet owners who financed their properties in 2000 were paying a relatively steep interest rate. With cheaper money available in 2005, a mom-and-pop hotel owner was just as likely to sell a struggling property to a speculator rather than refinance and pray for the best.

The trend of closures here follows roughly the same pattern of hotel sales in general, with the peak also occurring in 2005 and then declining sharply after 2007. So, assuming that a portion of all hotel sales end up as adaptive reuse projects, the trend line above can be explained as a simple correlation.

Lizzette Casarin
3/20/2013 12:22:00 PM
Very insightful, thank you.
Lizzette Casarin
3/20/2013 12:22:00 PM
Very insightful, thank you.
Lizzette Casarin
3/20/2013 12:22:00 PM
Very insightful, thank you.
Daniel Lesser
3/20/2013 11:47:00 AM
Great article Carter. CONGRATS!
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