As fewer Americans fly, East Coast sees some rebound
As fewer Americans fly, East Coast sees some rebound
24 JULY 2020 7:30 AM

U.S. hoteliers continue to see diminished demand growth as COVID-19 cases increase. But a drop in flights has led to a demand shift to East Coast markets, according to STR data.

HENDERSONVILLE, Tennessee—The U.S. hotel industry may be in the early stages of a troubling trend as the monthslong incremental recovery in revenue per available room looks to have reversed somewhat in the face of increasing COVID-19 cases.

Speaking on his weekly video on U.S. hotel performance, STR SVP of lodging insights Jan Freitag noted the weekly data since 4 July has seen week-to-week RevPAR drops—including a 54.6% year-over-year drop for the week ending 11 July and a 56% drop for the week ending 18 July—as the weekly new coronavirus cases grew over 400,000. (STR is parent company of Hotel News Now.)

“It’s noteworthy because we had since the week of 11 April continued to see better RevPAR percentage changes,” he said. “It’s going to be interesting to see if last week’s data was just a blip or a beginning of a trend.”

Freitag said the safest assumption is the increase in coronavirus cases led to a drop in corporate travel, with the week ending 18 July seeing the largest demand drops on Monday, Tuesday and Wednesday. This is reinforced by data from the Transportation Safety Administration.

“When we look at the TSA daily throughput counts, they declined, actually, for the first time from the prior week,” Freitag said.

A drop in air travel was somewhat good news for East Coast hoteliers, he noted, as it corresponded with a slight increase in demand as more people seemed to vacation closer to home.

Hotels in Maine saw a 19.2% increase in demand week over week, while it was up 18.5% in New Hampshire, 12.4% in Massachusetts, 8.8% in New Jersey and 8.5% in Rhode Island.

“That said, the highest occupancy states are still out west,” he said.

South Dakota, Montana, Idaho, Wyoming and Mississippi all saw occupancy exceeding 60%.

While flights decreased, the U.S. hotel industry still saw an increase in the number of rooms sold, with 3.7% week-over-week growth. That growth figure, however, pales in comparison to that seen earlier in the recovery.

From 11 April through 13 June, the weekly growth in roomnights sold averaged 8.3%. Since then, the average has dropped to 3.1%.

“But, of course, it’s good news there’s an increase given fewer people flew,” Freitag said.

The lower-rated classes continue to see the lion’s share of demand, with economy, midscale and upper-midscale hotels all exceeding 50% occupancy.

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 22 July and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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