US room demand growth slows as COVID-19 cases increase
 
US room demand growth slows as COVID-19 cases increase
17 JULY 2020 7:49 AM

Room demand in the U.S. has grown steadily since its low point in April, but weekly data from STR shows that growth is slowing as more states are seeing spikes in coronavirus cases.

HENDERSONVILLE, Tennessee—While room demand has grown since the trough of the week of 11 April, the pace of that growth has slowed in recent weeks.

In his latest video on U.S. weekly hotel performance, STR SVP of Lodging Insights Jan Freitag said room demand grew by 11% the week of 18 April, one week after the week of 11 April. The week after that, room demand grew by 7%. The average weekly room demand growth for the following months amounts to more than 8%, he said. (STR is parent company of Hotel News Now.)

Over the last four weeks, however, that growth has slowed to less than 3%, he said. The question now is whether this is a trend or a blip.

That slowing of this pace can be observed when looking at specific states, Freitag said. Wherever COVID-19 cases rose sharply, room demand in that state decreased over a two-week period. Data from the week ending 27 June to the week of 11 July (avoiding the 4 July comp) shows this clearly, he said. Room demand in South Carolina dropped 16% over two weeks. In Arizona, it fell just under 10%. Florida reported a drop of 7%.

“The question of course is, is this a statewide phenomenon, or is it just in the larger markets?” he said.

Looking at Asia and Europe, the larger metro areas were hit disproportionately hard while the outlying areas saw an increase in room demand and had a slightly better recovery, Freitag said. In the U.S., it’s clear some states saw the aforementioned declines across all or most of their markets.

“The point is just to say this demand decline is widespread and throughout the whole state,” he said.

In his video last week, Freitag focused on Florida specifically because of its significant increase in COVID-19 cases and its immediate effect on room demand. In reviewing the latest data from the state, the downward demand trend continued to hold for all markets except for Orlando, he said.

Leisure travelers chose states with the perception of being wide open and not as crowded as the beach destinations, Freitag said. Places such as Colorado Springs, Colorado, and South Dakota and Idaho saw increases in weekend occupancies, and many markets saw occupancies top 70%, he said.

“Idaho, South Dakota, Montana, Wyoming are the beneficiaries of the negative press that large cities or large beach destinations have gotten,” he said. “What we fully expect is that as the summer season continues, people will pick their car or their RV and go to the states that are considered to be a little less crowded.”

For more insights into U.S. hotel performance data, watch Freitag’s weekly video below:

Editor’s note: The video included in this article was filmed by Jan Freitag, SVP of lodging insights at STR, on 15 July and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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