U.S. hotel industry performance in February largely held a line well-established in prior months, but some notable exceptions in certain markets and earlier-than-expected signs of recovery already are triggering renewed confidence, according to Jan Freitag, national director for hospitality analytics for the CoStar Group.
The latest monthly data from STR, CoStar’s hospitality analytics firm, shows U.S. hotel revenue per available room — a key indicator of hotel performance — was down 44.8% in February compared to 2020 levels.
“That is in line with the prior months,” Freitag said in a video discussing the latest performance figures.
He added the year-over-year comparisons will be less dramatic starting with the March data, as the pandemic effect on performance began to be felt in March 2020.
“April 2020, of course, was the single worst month the U.S. hotel industry has ever experienced so the year-over-year percent changes will be a bit hard to interpret,” he said. “What we will do to put the coming monthly results in context is to index the 2021 results to 2019 to give you a better understanding of where the U.S. industry stands compared to a ‘normal’ year.”
Overall, slightly more than 45% of U.S. hotel rooms were sold in February.
“The national occupancy is a high-level indicator and so the occupancies in STR’s top 25 markets paint a very mixed picture across the United States. And just like last summer there are clear winners and losers in the large markets,” Freitag said.
U.S. hotel markets such as Tampa, Florida, and Phoenix, Arizona, were among the “winners” in February. Tampa hotel performance was driven by the Super Bowl, and Phoenix continued “to do well just like it always does in winter months,” Freitag said.
Markets that depend more on business from large corporate groups and meetings were on the low end of the occupancy spectrum. San Francisco, Chicago, New Orleans and Boston all posted hotel occupancies “at or below 35%,” he said.
However, group room demand, “with well over 1 million rooms sold,” is encouraging, Freitag said.
“It is exactly signs like this that spur deals,” he said, citing as an example the recently announced agreement for Vici Properties, a real estate investment trust spinoff of Caesars Entertainment, and Apollo Global Management to acquire The Venetian Resort Las Vegas and Sands Expo and Convention Center from the Las Vegas Sands Corporation.