For a third consecutive week, occupancy remained above 70% (25-31 July 2021), but that was down from the pandemic-era high (71.4%) achieved in the previous week.
Excerpt from STR
For a third consecutive week, occupancy remained above 70% (25-31 July 2021), but that was down from the pandemic-era high (71.4%) achieved in the previous week. While occupancy slipped, average daily rate (ADR) advanced to yet another record high (US$143) on a nominal basis. Nominal revenue per available room (RevPAR) stayed above US$100 for a second week, though it also fell from the previous week’s level. On a total-room-inventory basis (TRI), which accounts for temporarily closed hotels, weekly occupancy was 67.5% and nominal RevPAR was US$97. Those TRI metrics include the 1.3% of U.S. rooms still closed because of the pandemic.
After two weeks above 27 million, weekly room demand fell below that level, and was about 95% of the level seen in the comparable week of 2019. Demand has been down by an average of 8% compared with 2019 for the past eight weeks. However, we expect that gap to widen in the coming weeks as in-person school begin. STR’s School Break Report reveals that most U.S. schools will be in session by the third week of August. Anticipate that demand, and subsequently occupancy, will slide downward each week as schools restart. With the rise in COVID-19 cases due to the Delta variant, we don’t believe that dwindling leisure demand will be mitigated by an uptick in business and group travel. Also, unlike last year, demand will likely not be supported by the ability for families with children to work and attend school virtually.
Among open hotels, the number of markets with occupancy above 80% fell from 29 in the previous week to 25 during the most current week. However, two markets, Gatlinburg/Pigeon Forge, TN, and Colorado Springs, have remained above 90% for the past two weeks. There were also less markets with occupancy between 70% and 80% as well as more with occupancy between 60% and 70%. Four markets saw strong weekly occupancy gains with Chicago seeing the largest gain in demand due in part to the Lollapalooza music festival. Chicago occupancy has been above 60% for the past four weeks. Tucson remained at the bottom for a third week. Among the Top 25 Markets and using STR’s TRI methodology as most of the hotels temporarily closed are in that group, San Diego had the highest occupancy (81%), while New York City showed the lowest (51%). New Orleans, Washington, DC, and San Francisco all had weekly occupancy below 55%.
Property-level occupancy also shifted downward a bit with 74% of reporting hotels posting occupancy of 60% or more in the week, down from 76% in the previous fortnight. Twenty three percent of hotels reported weekly occupancy of less than 60%, up from 21% in the previous week. Three percent of hotels continued to see very low occupancy (less than 30%) with that percentage seeing little change in the past six weeks. Weekend occupancy stayed above 80% for a second consecutive week, and weekday occupancy reached another pandemic-era high (68%).
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