Tomorrow is Another Stay: Impacts of COVID-19 on the Hotel Industry (Part 2)

This is the second in a string of updates we will be posting here to keep hoteliers up-to-date on news and resources surrounding the coronavirus outbreak and its impact on the travel and hospitality industry.
By Jena Thornton


The effect from the coronavirus continues to have stunning impact on the hotel industry in the US and around the world.


Vital statistics

Here are some meaningful comments and statistics, provided by Smith Travel Research (STR):

“RevPAR decreases are at unprecedented levels—worse than those seen during 9/11 and the financial crisis,” said Jan Freitag, STR’s senior VP of lodging insights, on a recent webinar shared with the hospitality industry.

“Seven of 10 rooms were empty around the country. That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further. With most events canceled around the nation, group occupancy was down to one percent with a year-over-year RevPAR decline of 96.6%. The industry is no doubt facing a situation that will take a concerted effort by brands, owners and the government to overcome,” Freitag said.

Occupancy for the Top-25 U.S. hotel markets the week of March 21. Provided by STR.

Aggregate data for the Top 25 Markets showed steeper declines across the metrics: occupancy (-66.3% to 26.2%), ADR (-35.2% to US$105.40) and RevPAR (-78.2% to US$27.59).

  • San Francisco/San Mateo, California, recorded the worst declines in each of the three key performance metrics: occupancy (-80.7% to 16.6%), ADR (-44.7% to US$151.25) and RevPAR (-89.3% to US$25.08).
  • New York, New York’s drop in RevPAR (-86.5% to US$26.98) was due primarily to the second-steepest decrease in occupancy (-80.5% to 16.8%).
  • New Orleans, Louisiana, matched for the second-largest decline in RevPAR (-86.5% to US$20.02), mostly because of the third-largest decrease in occupancy (-76.0% to 20.2%).

Other news

Over 3.28 million people in the U.S. applied for unemployment benefits for the week ending March 21st, 2020. That surpasses the previous record almost 5 fold of 695,000, set in October 1982.

The Wall Street Journal has reported that Keith Hall, former director of the Congressional Budget Office and adviser to President George W. Bush, said the jobless rate could approach 20% over the next few months, an unemployment level economists believe occurred during the Great Depression. “That is well above the post-World War II record high of 10.8% at the end of the 1981-82 recession,” the article states.

These are grim times for the service industry and our economy as a whole. We will continue to monitor the statistics reported by Smith Travel Research (STR) as well as other meaningful information on the state of the hotel and service industry in the weeks to come.

Photo by Nitish Meena on Unsplash

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Kinzer Partners’ office is closed temporarily in order to keep our employees safe and stop the spread of COVID-19. The safety of our employees, clients, partners, and vendors are of the utmost importance.

While we might not physically be sitting at our desks, we are still connected and available to assist you with any commercial real estate struggles you are having. We’d venture to say our work from home (WFH) dress codes might be ten times better than that in the office! A small solace during this crazy time.

If you have questions on anything regarding your real estate and how it is/has/will be changing in the current environment, don’t hesitate to reach out. We might not have all the answers but we will navigate the unknown right alongside you, offering support and virtual HH drinks when needed.

Wishing you safety, health and ask you to keep washing those hands!

Everyone at Kinzer Partners

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