Seven Weeks of Modest Occupancy Growth for US Hotels

Weekly US Hotel Demand Update: Week-ending May 20th was the 7th straight week of modest occupancy improvement; at 35%, up from a low of 21% on April 11th. Despite the increase, this is still a 70% RevPAR decline vs last year.

April closed out with the worst RevPAR decline ever, down 80% in the US. Driven by declines north of 90% at Upper Upscale & Luxury properties. Top 25 markets continue to be heavily impacted. Finally, on the development front, the pipeline has peaked, with a number of projects on early stages moving to abandoned or postponed.

Originally from LinkedIn:

https://www.linkedin.com/posts/andres-orta-travels_us-hotel-performance-results-april-2020-activity-6672148618444701697-FUlL

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Social Media + Hospitality

A recent study by The Center for Hospitality Research at Cornell University constitutes one of the first pieces of empirical research on the effect social media has on hotel purchasing decisions by different market segments. The report titled How Travelers use Online and Social Media Channels to Make Hotel-choice Decisions takes a snapshot of the rapidly changing field of how consumers gather information and make their decisions regarding travel purchases, based on responses of 2,830 recent travelers. This report is particularly helpful in that it gathered findings based on the guest's market segment and reports how a channels importance varies according to the stage in the decision process. "Business travelers often use the hotel recommended by their company, although many of them use search engines or online travel agents for their hotel search. Recommendations of friends and colleagues are less important to business travelers than they are to leisure travelers

Occupancy continues to grow, albeit at a decelerated pace. Is the occupancy plateau near?

The week ending August 1st, brought US Occupancy to 48.9%, according to STR, up 1.8% over the previous week. Here we see the occupancy by week. While this is quite an improvement from the 22% occupancy we saw back in April, the rate of growth is slowing. Over the last five weeks, we have seen the rate of growth average 1.6%, which is much lower than the rate of growth we saw over the previous 2 months of 7.8%. The chart below shows the occupancy change week to week, 15 out of the last 16 weeks have seen growth. This occupancy growth has been fueled by leisure demand, of concern is the looming end of the summer vacation period. Chris Nassetta, Hilton's CEO, mentioned in their most recent earnings call that he expects Business/Corporate demand to offset the drop in Leisure as we enter the fall. Suggesting that leisure demand is unlikely to continue at its current pace indefinately.

HOSPITALITY BRAND

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