The landfall and aftermath of Hurricane Ian in the southeastern U.S. closed some hotels in the direct path of the storm and drove evacuees to hotels in surrounding markets.
In Fort Myers, Florida, hotel room inventory was down by 6,000 rooms, or 45% of the total, compared to the week prior to the hurricane. Weekly data reporting to STR, CoStar’s hospitality analytics firm, suggests that the impact to hotel supply elsewhere is not severe, but information is still being gathered. The extent of the damages to the affected hotels “means that closures are likely to be lengthy with demolition of some properties possible,” according to STR.
Combined with diminished hotel demand due to observance of the Jewish holiday Rosh Hashanah, U.S. hotel performance declined overall in all key metrics for the week ending Oct. 1.
The holiday impact to performance was expected, while of course natural disasters are always unpredictable.
For the first time since the second week of January, hotel rates dropped by more than 5% week over week, with average daily rate down 5.5% to $150. Still, ADR was 16% higher than it was in the comparable week of 2019 — or even when adjusted for inflation — and 14% above the 2021 level.
The weekly decline in ADR was the same in and outside of the markets directly affected by Hurricane Ian.
U.S. hotel occupancy also declined from the previous week to 66.4%, a 3.5-percentage-point difference. However, occupancy was up 4.7 percentage points from the comparable week in 2021.
The combination of lower occupancy and rates resulted in a 10% week over week decrease in revenue per available room. At $99, RevPAR for the week was still 13% higher than in the comparable week of 2019, or down 2% adjusted for inflation, and 23% higher than in 2021.
The hotel performance impact of Hurricane Ian is most pronounced in the data Tuesday through Thursday in Florida, Georgia and to a lesser extent, Alabama — and then continuing into the weekend in North Carolina and South Carolina.
As expected, most hotel markets in the direct path of the hurricane reported drops in occupancy, while others benefited by those fleeing the storm.
Occupancy declined from Tuesday to Saturday in all but four Florida markets — Florida Central, Fort Lauderdale, Melbourne and Palm Beach.
In markets directly affected by the hurricane — in Florida counties declared disaster areas by the Federal Emergency Management Agency and those closest to landfall in the Carolinas — hotel occupancy Tuesday to Saturday declined by 9 percentage points week over week.
Jacksonville and Tampa’s hotel markets reported the steepest drops in occupancy, down 14 percentage points and 12 percentage points, respectively. Submarkets where occupancy declined the most included Jacksonville Beaches, down 34 percentage points; followed by Clearwater, Tampa Airport and Daytona Beach, all down by 20 percentage points or more.
In Fort Myers, where the damage from the hurricane was most severe, hotel occupancy dropped by five percentage points over the five-day period. But that figure does not account for closed hotels. Using the supply from a week ago, occupancy in the market is down 21.3 percentage points week over week.
The Florida hotel submarket with the sharpest gain in occupancy, due to taking in evacuees, was Kissimmee East, even though it, too, was in the disaster declaration area.
Occupancy in three submarkets — Ocala, Fort Piece/Port St. Lucie and Tampa East — surpassed 80% Tuesday through Saturday. Occupancy topped 85% in 10 of the 29 submarkets in the path of the hurricane on Wednesday as the storm made landfall.
South Carolina and North Carolina hotel markets also reported sharp occupancy decreases. In Charleston and Myrtle Beach, occupancy Thursday to Saturday was down 29 percentage points week over week. Columbia hotels also reported a steep decrease over those days, down 26 percentage points. Savannah, listed early on as a potential landfall target, also experienced a large retreat in hotel occupancy, down 28 percentage points, in the days leading up to landfall.
Florida markets not included in the FEMA disaster declaration had mixed results given the uncertainty of the storm. The largest decline in occupancy was in Florida Keys, down 29 percentage points in the week with decreases exceeding 33 percentage points from Wednesday to Friday. Miami fared better with occupancy falling only four percentage points during the week.
Markets outside of the storm’s path in Georgia and Alabama reported increased occupancy rise, led by 17% growth in the Macon/Warner Robins market Tuesday through Saturday.
While none of the gains were particularly strong, occupancy increased in all Alabama markets except Birmingham, where occupancy was flat week over week. Certain submarkets, however, reported solid week-over-week occupancy gains including City of Mobile, which was up seven percentage points; Montgomery, which was up five percentage points; and Dothan/Enterprise, which was up three percentage points.
Hotel rates dropped overall in the markets directly affected by the hurricane, though some hotels raised rates in surrounding areas where demand was high.
In Florida, ADR decreased by more than 10% week over week in six submarkets, including Orlando International Drive, Clearwater, St. Petersburg, Fort Myers Beach/Sanibel and Jacksonville Beach. In Tallahassee, ADR also took a big fall, down 33% week over week, but the prior week also included a college football boost to demand.
On the flip side, 11 submarkets reported ADR increases of more than 10% week over week from Tuesday through Saturday. In four submarkets — Ocala, Bradenton/Airport, Gainesville and Tampa North — ADR increased by more than 20% week over week and averaged $136.
Outside of Florida, the largest ADR declines were reported in the beach markets of South and North Carolina, down more than 10% week over week. Rates declined by a similar percentage in Savannah as well as Charlotte and Columbia. The Macon/Warner Robbins and Greenville/Spartanburg markets reported the largest weekly ADR gains outside of Florida, up 10% week over week, but even with the growth, ADR in Macon/Warner Robbins was under $100 and at $117 in Greenville/Spartanburg.
Outside of Ian’s Path
In the markets where demand wasn't affected by the hurricane, observance of the Rosh Hashanah holiday resulted in less weekday and group travel, particularly in key U.S. hotel markets.
Overall, occupancy for markets outside of the impact of Hurricane Ian reached 67.3%, down 3.3 percentage points from the prior week. Weekday occupancy showed the sharpest decreases on Monday and Tuesday due to the religious observance.
Weekday demand was down 8.5% week over week in the 21 major markets outside of the southeast, with group demand accounting for 79% of the loss. The largest week-over-week decreases in total weekday demand were in key convention cities, including Anaheim (down 21%), San Francisco (down 19%), New York City (down 13%) and Washington, D.C. (down 13%). In total, weekday occupancy in those 21 major markets was 71%, down 6.6 percentage points from a week prior.
Eleven markets — including Boston, New York City, San Francisco and D.C. — reported weekday occupancy at or above 70%, with Boston and NYC above 80%. Albuquerque also stood out with weekend occupancy of 90%, up 19 percentage points week over week, as the market hosted the start of the International Balloon Festival.
After the Rosh Hashanah observance (Thursday to Saturday), occupancy in the 21 markets combined increased to 76%, down 1.2 percentage points week over week. Boston, Denver, Los Angeles and New York City hotel occupancy surpassed 80% for those days, and most others in that group reported occupancy above 70%.
Given the impact in group demand from the religious observance, it’s not surprising that the largest decline in weekly occupancy came at luxury and upper-upscale hotels, followed by upscale. Weekday occupancy declined 11 percentage points week over week in urban luxury and upper-upscale hotels with 300 or more rooms. Weekday occupancy was down to a lesser extent in all other chains scales.
Weekday ADR also decreased the most in the luxury and upper-upscale chain scale, down 15% and 10% week over week, respectively.
Outside of the hurricane-hit markets, RevPAR was down 10% week over week, with the largest decline (-14%) coming on weekdays due to the Rosh Hashanah holiday.
Over the past 28 days, 43% of the 166 STR-defined markets had real inflation-adjusted RevPAR above 2019 levels, down from 48% a week ago. Most markets (51%) are in “recovery” as real RevPAR was between 80% and 100% of 2019. Eleven markets — including New Orleans, San Francisco and Washington, D.C. — were in “depression” with real RevPAR between 50% and 80% of the 2019 value.
Isaac Collazo is VP Analytics at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.