The impact of the Polar Vortex on US hotel performance
 
The impact of the Polar Vortex on US hotel performance
15 FEBRUARY 2019 9:19 AM

January temperatures chilled parts of the United States to record lows as hotel performance in some markets froze while others cranked up the heat.

BROOMFIELD, Colorado—On 3 January, a few sections of the Polar Vortex split away from their usual area over the North Pole, and moved down to the United States’ Great Lakes area. With these splits came temperature drops and wind chills below minus 40 degrees Fahrenheit, the coldest since the early 1990s, according to the National Weather Service.

The effects of this Polar Vortex split will be felt for several weeks, with some ebbs and flows in the temperatures. Of course, this has an impact on residents and out-of-towners alike, as well as on the hotel industry.

The initial impact of the vortex on the total U.S. hotel performance results was positive. As the winter storm arrived on 19 January, two days ahead of MLK Jr. Day, U.S. Revenue per available room levels rose 23% year over year, and the following day occupancy levels spiked 15%. These increases are expected since flights are canceled, travelers are hunkering down and hotels fill up. However, as weather events continue, these trends often reverse when hotels suffer a rash of cancellations from travelers who can't get to their destinations. On 21 January, total U.S. RevPAR declined 15%.

In terms of local impact, the winter storm hit Vermont and surrounding areas the hardest on 20 January. To the joy of snow lovers hitting the slopes for the long weekend, the storm brought between 10 and 20 inches of snow. Statewide, hotels registered a 110% increase in occupancy, increasing to 58.6%. Average daily rate rose 28.7% to $142.90.

Kansas City, Missouri-Kansas (+82.5%) and the Pennsylvania South Central market (+78%) experienced the second- and third-highest increases in occupancy, respectively, whereas Des Moines (-16.8%) and Chicago (-21%) were the two markets with the strongest occupancy declines.

This phenomenon also brought 52 consecutive hours (30 January to 1 February) of temperatures below zero to the Chicago area, where occupancy dropped by 15.6% on 30 January. On 31 January, North Dakota (+26.3%) and Cleveland, Ohio (+20.1%) markets benefited from the highest increases in occupancy, while Lexington, Kentucky (-29%) and Minneapolis/St. Paul, Minnesota-Wisconsin (-44.1%) markets had the largest occupancy decrease.

The map below summarizes these performance levels, including a ranking of top and bottom performers for each day.

For a quick, yet thorough, explanation of the current Polar Vortex phenomenon, check out this publication by The New York Times.

This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.

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