HENDERSONVILLE, Tennessee—The U.S. hotel industry likely hasn’t reached the bottom of performance declines, and it will still be some time before it begins to climb out of this pit, said Jan Freitag, SVP of Lodging Insights at STR.
Hoteliers desperate for a bright spot in the “dismal” data might see a slightly lesser decline in revenue per available room for the week ending 18 April as encouraging, but Freitag warned against that outlook.
RevPAR was down 79.4% for the most recent week on record, after six weeks during which the year-over-year declines accelerated from -11.6% to -83.6%.
Source: STR, © 2020 CoStar Realty Information, Inc.
“The weekly data shows that RevPAR declines continue unabatedly. The data for the week ending April 18 is maybe not quite as dire as it was the for the last couple of weeks, but we would certainly not call this a recovery by any means,” Freitag said.
“This is probably just a sign of a relatively easier Easter comp when compared to the same week last year and more first-responders staying in hotels.”
He also noted that declines in average daily rate may be misinterpreted.
“We want to caution that this is probably not a sign of revenue managers actively yielding rates down. Rather, as we like to say, it’s math,” he said.
“Our sample slightly changed, and a lot of larger properties closed shop for a couple of weeks, and that probably implicated how the ADR calculation ran. This is not yield managers trying to drum up demand by lowering rates. We will likely see that phenomena, though, as we get into Q3 and Q4 and room demand starts to increase.”
April and May data is also expected to be enlightening as to the severity of this down cycle and how prolonged the recovery might be, Freitag said.
“We are now in the unfortunate point in time where room demand is falling off a cliff, and it seems much steeper, much faster than in other recessions,” he said. “We will need to wait for the April and May data to see if that pans out.”
For more of Freitag’s insights into the U.S. hotel performance data, watch the video below:
Editor’s note: The video included in this article was filmed by Jan Freitag, SVP of lodging insights at STR, on 22 April and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.