Both Iowa and New Hampshire hotels benefited from being early states in the 2020 primary season.
BROOMFIELD, Colorado, and HENDERSONVILLE, Tennessee—More than half of the delegates have been awarded at this point in the 2020 Democratic Primary.
While some states have delayed their primaries or considered moving to mail-in ballots, Iowa and New Hampshire seem like a distant memory. However, both states saw record-setting hotel performance this year as a result of the caucuses and primaries.
- Iowa hotels saw 20% growth in occupancy in the seven days leading into the caucus, the highest growth of any of the past five election cycles.
- Des Moines, Iowa, hotels set a record the first- and second-highest daily average daily rate ever on the Sunday and Monday of caucus week.
- New Hampshire hotels brought in an additional $10.8 million in rooms revenue in February, the highest year-over-year increase in monthly revenue ever for the state.
- Portsmouth/Manchester, New Hampshire, hotels saw an impressive 91% ADR growth for the week leading up to the primary.
The 2020 Iowa caucuses were held on 3 February and, as in previous election cycles, hotels around the state benefited greatly in the weeks and days leading up to the caucuses.
In previous caucus years, the three days leading up to the caucuses have shown a greater occupancy growth than the full week leading up. This year, the growth for both time periods was very similar, with the full week actually showing slightly greater growth. This suggests that the demand growth was more sustained, rather than the “quick peak” in demand seen in previous years. The 20% growth in occupancy achieved by hotels in the seven days leading into the caucuses is a record for the past five election cycles. This was likely influenced by the unprecedented size of the Democratic candidate field, and the ensuing media attention on this year’s contests.
Because of the timing of the caucuses, the demand and revenue lifts were spread across January and February. Statewide, Iowa hotels brought in an additional $12.6 million in rooms revenue in the first two months of the year. In 2019, those months only saw a growth of $3.4 million.
The January occupancy growth of 15.3% in the Des Moines, Iowa, market was stronger in 2020 than any election cycle since 2004. Although the ADR growth was the weakest of the past six election cycles, the market also saw 9.8% ADR growth in February, adding a total of $9.2 million in rooms revenue in those months over January and February of 2019. The immediate run-up to 3 February was even stronger, with over 50% growth in occupancy and ADR for the seven days leading into the caucuses. Des Moines hotels also set records on the Sunday before the caucuses and caucus night, with the highest daily ADRs ever for the market at $178 and $168. The previous record of $166 was achieved on the Sunday before the 2016 caucuses.
As in previous years, January demand growth for the Des Moines, Iowa, market was strongest in the upper-midscale class and above. However, although luxury and upper-upscale class hotels saw their strongest demand growth since the 2004 caucuses, upper-midscale and upscale hotels saw the highest demand growth of all the collapsed classes with 22.6%. Two upper-upscale hotels have opened since the last election year, adding 539 rooms in that market to the segment. Midscale and economy hotels had their strongest caucus-related demand growth yet, with 13.7%.
The 2020 New Hampshire primaries were held 11 February. The impact was concentrated in the Portsmouth/Manchester, New Hampshire, tract, with occupancy growth of 39% and ADR growth of 90.9% in the week leading up to the primary. The occupancy impact in New Hampshire has been declining over time, both statewide and in the Portsmouth/Manchester, New Hampshire, tract.
As in previous years, this extraordinary daily and weekly performance growth leading into the caucuses translated to strong monthly performance growth as well. February brought a record $10.8 million in additional rooms revenue to the state’s hotels over February last year. This was the highest ever year-over-year total increase in revenue dollars for any month in the state. The Portsmouth/Manchester, New Hampshire, tract showed very similar monthly performance growth as in previous years. Since the 2004 primaries, the tract’s monthly revenue per available room growth has been between 47% and 55%, with 50.6% growth in February of this year. This was mainly fueled by strong ADR growth of 35.1%.
Although upper-upscale and luxury hotels in the state saw slightly higher ADR growth in 2020 than in 2016, that hotel segment continues to see the lowest ADR growth from the primaries. Upscale and upper-midscale saw the strongest ADR growth with 23.8%, slightly lower than the 26.6% in 2016.
Nevada and South Carolina
Nevada and South Carolina, the next states in the primary season after Iowa and New Hampshire, saw very little hotel performance impact in 2020 from hosting early caucuses or primaries. This continues a trend seen in previous years—although there may be other states classified as “early” primary states as they precede Super Tuesday, only Iowa and New Hampshire experience a reliable hotel performance lift in every election year.
Hannah Smith is a consultant in STR's Consulting & Analytics division. Will Sanford is a Research Analyst at STR.
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.