It may be the shortest month, but February brought excellent tidings to the U.S. hospitality industry. Occupancy reached 45.3%, its highest level since October 2020, and that’s not the only good news on the horizon.

Despite the heavy winter snows last month, February 2021 hotel performance was surprisingly decent. U.S. hotels lifted occupancy 6 percentage points last month, which is roughly in line with what we’d expect pre-COVID-19.

Not to temper the good news too much, but reopening hotel rooms could still produce some minor headwinds. Nationally, about 3.4% of rooms remained temporarily closed, but that figure varies widely by market, with major markets the most affected.

New York City; San Francisco; Orange County, California; Chicago; and Orlando, Florida, are still reporting double-digit room closures, which means not only is the standard data telling half the story, but recovery might suffer if and when these rooms do eventually reopen.

On the topic of total room inventory, it’s also important to call out supply. Standard supply growth is not especially useful at this point in time. It’s the number of currently available rooms this year compared to currently available rooms last year, yes, but it’s impossible to discern how much new inventory is in the market or how many rooms are still closed.

Total-room-inventory supply growth and/or rooms closed — which is just the percent change in standard and toral-room-inventory supply — are the go-to metrics. From here, we can see select-service hotels continue their meteoric rise in popularity, but the beleaguered luxury class is not far behind in new room growth.

Luxury hotels also hold the dubious honor of highest percentage of total rooms still closed. Although, as the smallest class by total room count in the U.S., it’s relatively easier for luxury hotels to attain higher percentage changes, be it closures or supply.

February 2021 marks 12 months of COVID-19, which makes rolling 12-month data a tidy way to summarize the pandemic’s impacts. Demand fell 40% over the past 12 months, but hotel closures and the indomitable spirit of the American traveler held occupancy to 41.4%, which is not so bad compared to the rest of the world.

Tight lockdowns in the first half of 2020 allowed domestic business and leisure travel in Mainland China by the third quarter of last year — and a true 12-month comparison should probably be January R12, not February. United Arab Emirates hotel occupancy was strongly influenced by Dubai, one of the only markets open to international travelers with commensurately high occupancy. The U.S. edged past Australia to land in third place, thanks to strong domestic leisure demand over summer and into fall.

If the U.S. is doing relatively well, it’s a good guess individual market performance isn’t terrible either. However, there are always outliers. These days, it’s the top 25.

Only four of the top 25 markets outperformed the U.S. last month. Norfolk, Virginia, Tampa and Miami all boast beaches, one of the top predicators of strong hotel performance in the COVID-19 era. Norfolk is also home to a military base, which has helped offset demand declines, and Tampa hosted the Super Bowl. Detroit outperformed the U.S. year over year due to relatively easy comps, as market hotels struggled even pre-COVID-19.

If February brought inklings of good news to come, March daily data has roared in like a lion, with stronger and stronger occupancy each week. Join us next month to see the full impact of spring-break season.

Kelsey Fenerty is a research analyst at STR.

This article represents an interpretation of data collected by STR, CoStar's hospitality analytics firm. Please feel free to comment or contact an editor with any questions or concerns.