Global hospitality data company STR has released hotel industry reports for the week ending March 21 and in nearly all markets, the metrics are continuing to get worse due to the ongoing pandemic of the coronavirus COVID-19.
The reports are based on data from 68,000 properties and 9.1 million rooms around the world.
Compared to 2019 figures, occupancy is down as much as 96% in Italy to 68% down in China, 67% down in the United Kingdom, 59% down in the United States, and 48% down in Singapore.
As the first market to deal with the coronavirus, China is also the first to show signs of stabilization. About 87% of the country’s hotels are now open – up from a low of 40% – and occupancy is starting to turn in a positive direction, to about 22% for the week ending March 21 from a low of 10% in February.
The turning point in China – according to STR analysts – coincides with a halt in new cases of the virus.
But markets around the world can not begin to rebound in that way until they too stop the spread of COVID-19, which is why a figure of 30% absolute occupancy in the U.S. for the week ending March 21 is not a good sign, says STR’s senior vice president of lodging insights, Jan Freitag.
“The U.S. hotel industry occupancy is not falling as quickly as it is in other countries and as it was in China because there is not a national, federal lockdown on the country,” he says.
“What that further then means is that there are still a lot of people traveling… what that means also then is that there are still a lot of people who are not practicing social distancing, physical distancing. And what that implies then further is that the uptick, the rebound will take us much, much longer as there are still so many more people who could get infected.
“Make no mistake, full hotels almost equate with full hospitals.”
Around the globe, RevPAR – revenue per available room – is down sharply, in fact much more than the industry experienced after the September 11 terror attacks and after the financial crisis of ‘08/’09.
For example, in China, RevPAR was down more than 85% year-over-year for the week ending March 1, whereas its lowest figure during the financial crisis was negative 59% in August 200. Figures for Europe and the U.S. are continuing to decline, with a drop of 44% in Europe and 69.5% in the U.S. year-over-year for the week ending March 21 – the steepest weekly RevPAR decline STR says it has recorded in its 30-year history.
And in the last week, the decline is accelerating, for example averaging 90% across all major cities in Europe.
“RevPAR decreases are at unprecedented levels – worse than those seen during 9/11 and the financial crisis,” Freitag says.
“Seven of 10 rooms were empty around the country [United States]. 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 1% 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.”
And Freitag says it is possible that the 1% figure is a false positive because it may be “that a lot of rooms were prepaid and reported to us without anybody actually staying in them.”
Aggregate data for the top 25 markets in the U.S. shows steep declines, with occupancy down more than 66% to 26.2%, average daily rate down more than 35% to $105.40, and RevPAR down nearly 80% to $27.59.
In the U.S., the San Francisco market has shown the worst declines, with New York and New Orleans close behind.
Looking ahead, STR says forward occupancy has collapsed. While last week’s data for the upcoming 14 days was holding around 20 to 30% in key markets in Europe, now it is down to 5 to 20% as more cancellations come through and hotels close.
As to predictions for recovery, Jesper Palmqvist, STR’s area director for Asia Pacific, says the hope is dimming for a sharp recovery, such as was seen during the SARS crisis.
“We know that what happened there was a quick v-shaped recovery after 6 months,” he says.
“A month and a half ago we thought maybe this is an option. It’s not an option anymore. It seems very unlikely for that happen.”
Source: Travel Report
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