Following a week where occupancy broke the 50% mark, U.S. hotel performance fell back a bit for the week ending 22 August. Back-to-school and regional events did drive some localized occupancy, however.
NASHVILLE, Tennessee—For the week ending 22 August, the U.S. saw a rollback of some of the small gains posted the prior week, according to STR’s SVP of Lodging Insights Jan Freitag in his weekly video presentation.
STR is the parent company of Hotel News Now.
“Unfortunately, this week’s headline could be, what the summer giveth, the summer taketh away,” Freitag said, referring to the decline in U.S. room demand of nearly half a million room nights—a 2.7% decline in demand compared to the week ending 15 August.
While the week ending 15 August saw U.S. hotel occupancy breaking the 50% mark for the first time in months, this week that occupancy was down to 48.8%. That number, Freitag noted, represents hotels that are open. Around 5% of rooms in the U.S. still remain closed.
Revenue per available room dropped 46.1% last week compared to the same week in 2019, which is roughly the same-size drop as the week ending 15 August.
For the last few weeks, “week over week we saw better data,” Freitag said. “Last week, the data was even with the prior week, so there was no change. In this environment, I would argue that is bad news.”
Market, region standouts
Global recovery events continue to be reflected in hotel performance.
In the U.S., the Iowa City/Waterloo, Iowa; and Eureka/Crescent City, California, markets both saw occupancy levels over 80% for the week (85.9% and 84%, respectively).
The University of Iowa started in-person classes last week, leading to that market’s occupancy jump. And the Red Salmon Complex Fire in California is affecting the Eureka/Crescent City market, leading hotels to take in more first responders and displaced residents.
Globally, Freitag said hotel performance numbers show that “China is very much open for business.”
As hotels in Europe continue to open, he said “The occupancy in Europe … is firmly increasing and has a chance to soon overtake the United States occupancy.”
Freitag pointed out that for the first time in many months, gross operating profit per available room (GOPPAR) was positive for full-service hotels in July. STR’s monthly P&L data for July shows that all classes saw positive GOPPAR in July.
While elements of revenue still are down—full-service F&B revenues are flat or down, and rooms revenue is down $35 year over year—positive trends are indicative.
“We overall think the P&L data is encouraging,” Freitag said. “We think it shows cost-cutting measures are taking hold, and all classes and all service levels are GOP-positive.”
Editor’s note: The video included in this article was filmed by Jan Freitag, SVP of lodging insights at STR, on 26 August and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company. Data in the story and video reflects the week ending 22 August though Freitag mentions “the week ending August 25” in the video.