HENDERSONVILLE, Tennessee—The question of the timing of state stay-at-home (SAH) order expirations and whether hotels in the early expiration states saw a benefit has been asked frequently in STR’s recent presentations. (STR is the parent company of Hotel News Now.)
The answer is a qualified yes. However, as each state is unique, there are exceptions.
The chart below shows the percentage change in actual room night demand comparing the week ending 6 June 2020 to the week ending 11 April 2020 for each U.S. state. States were placed into three groups based on when their SAH orders expired:
- Any time in April (includes states that never issued SAH orders).
- First half of May.
- Second half of May (includes states where orders have not been lifted).
The week ending 11 April was selected as the base period for comparison because this is the week when total U.S. room night demand reached the lowest point of the COVID-19 period and, for the history books, the lowest weekly demand since STR started tracking weekly hotel performance.
Hotels in states where SAH orders expired earlier generally saw more positive results as indicated by the demand increase observed in states in each of the three reopening groups. More than half of the states in the groups where SAH orders expired in April (nine of 17 states) and in early May (eight of 16 states) experienced a demand increase above the U.S. average. Among states where SAH orders expired later, only four out of 17 states experienced a room demand increase above the U.S. average. With this pattern, it appears that states opening earlier saw more positive results.
There are interesting exceptions in each group.
external
|
In the first group, four of the states that never issued SAH orders (Arkansas, Iowa, Kentucky, and Nebraska) saw a demand increase less than the U.S. average. On the other hand, South Dakota (a state that also never issued SAH orders) saw the greatest demand increase of any state. Likewise, Tennessee, a state with a regional reopening, saw one of the greatest demand increases.
Exceptions among the late SAH expiration states are notable with Washington, D.C., Michigan and Minnesota, each experiencing well-above average demand increases. For Washington, D.C., it is possible that the recent protests have contributed to the region’s strong weekly demand. Prior week for Washington, D.C. was below the industry average. Minnesota and Michigan have posted consistently higher demand in the past two weeks compared to the industry average.
All states are unique with their own set of circumstances leading STR analysts to conclude with a qualified “yes,” hotels in states opening earlier generally saw more positive results, with exceptions. Additionally, it is important to keep in mind that hotel room demand levels across all states are well below levels experienced at the same time last year and that the industry has a long recovery road ahead.
The chart below lists the publicly announced SAH expiration orders for each state.
https://www.nytimes.com/interactive/2020/us/states-reopen-map-coronavirus.html
Chris Klauda is Senior Director of Market Insights at STR.
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.