Wildfires in western US cause performance fluctuations
 
Wildfires in western US cause performance fluctuations
02 OCTOBER 2020 8:37 AM

An STR analysis of more than 2,000 U.S. hotels in close proximity to western wildfires shows fluctuations in occupancy and rate in the dates around the natural disasters.

HENDERSONVILLE, Tennessee, and BROOMFIELD, Colorado—The wildfires that have devastated parts of the western U.S. have created an added layer to the complex hotel performance situation that has played out over the course of a difficult 2020.

As fires continue to rage, the duration of the hotel performance impact remains to be seen. However, with several weeks of daily data, STR is equipped to provide an update that covers the geographic breadth of this ongoing disaster.

Property closures
Historically, hotel closures amid wildfires have been limited because most properties are located near major roadways rather than residential areas. In this case, there have been reports of resorts among the destruction in California’s Napa Valley, and STR’s census database currently shows seven wildfire closures. A handful of the closed properties are already reporting reopening dates in the coming weeks, while others suffered significant damage, according to local news reports.

High-level impact
STR-defined markets in areas affected by wildfires have ranked among the nation’s occupancy leaders over the past month. In fact, most of the top weekly occupancy levels were in part due to displaced residents from natural disasters—hurricanes in the Gulf region also played a role.

Performance fluctuations visible nearest the wildfires
The geographic area affected by wildfires is significant. The map below shows how extensive the wildfires have been in two of the more heavily impacted hospitality submarkets in California (Napa Valley and Santa Rosa/Sonoma).
From 450 wildfires in the National Interagency Fire Center database (as of 22 September), STR focused on the 225 largest wildfires (affecting 500 acres or more) and filtered to those hotels within 10 miles of the wildfire perimeter. This yielded a list of more than 2,000 hotels, of which more than 1,300 are STR data participants. Grouping hotels together nearest the largest wildfires helped to remove the noise in the data and show a trend over time.

Key findings:
• Of the hotel properties analyzed, running seven-day occupancy decreased 5.1 percentage points from 62.3% at the beginning of a wildfire to a low of 57.2% by day 21 of the wildfire event.
• Average daily rate steadily declined in the days leading up to the wildfire, from $118.33 two weeks prior to the wildfire to a low of $109.67 at day zero, a decrease of 8.7 percentage points within a three-week period.
Claudia Alvarado is Analytics Manager with STR’s Consulting & Analytics team, based in Broomfield, Colorado. Will Sanford is a Research Analyst with STR based in Hendersonville, Tennessee.

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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