Hotel Industry: 10/04-10/10

Hotel Weekly Review

Nationally, hotel occupancy was down 29.2% compared to 2019 this week. Atlanta was 5th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-29%), up from last week’s ranking of 6th out of 25.

Nationally, hotel occupancy rates by location slightly recovered in some areas compared to last week. Despite large occupancy declines, urban (-49.6% YoY occupancy decline) and resort (-37.2% YoY occupancy decline) hotels recovered by 1.1% and 1.4% respectively compared to last week. Suburban (-26.9% YoY occupancy decline) and airport (-40.5% YoY occupancy decline) hotels slightly declined by -0.7% and -0.8% respectively compared to last week. The best performing hotels in terms of occupancy declines, small metro/towns (-12.5% YoY occupancy decline) and interstate (-14.9% YoY occupancy decline) hotels, recovered by 1.9% and 0.1% respectively compared to last week.

Week of October 4th Winners & Losers

For chain scale segments, all segments except economy hotels slightly recovered. Economy hotels (-11% occupancy decline) saw occupancy rates decrease by 1% compared to last week. Luxury (-64.2% occupancy decline) and upper-upscale (-60.2% occupancy decline) had the largest week over week recovery with occupancy rates recovering 2% and 1.8% respectively. Upscale (-36.9% occupancy decline) and independent (-24.8% occupancy decline) recovered occupancy by the same amount, 0.8%, week over week. Luxury hotels continue to have the best pricing power despite occupancy large occupancy declines with only a -16.9% drop in ADR (3rd out of the 7 chain scale segments).

The worst-performing hotel locations in terms of overall occupancy compared to last year are urban (38.9% occupancy), resort (44.2% occupancy), and airport (46.2% occupancy) hotels had occupancy declines of -49.6%, -37.2%, and -40.5% respectively compared to the same week last year.

The top-performing hotel market based on occupancy recovery, Norfolk/Virginia Beach (-16.7% occupancy decline this week compared to 2019), saw its third consecutive week of occupancy declines (-0.6%) compared to last week. The worst performing market, Oahu Island, also saw week over week occupancy declines compared to last week (-0.7%).

Top 6 Performing Cities by change in occupancy

City	2020 Occ	2019 Occ	% Change
Norfolk/Virginia Beach, VA	54.7%	65.7%	-16.7%
Houston, TX	54.4%	67.5%	-19.5%
Phoenix, AZ	53.7%	71.8%	-25.1%
Tampa/St Petersburg, FL	50.2%	68.9%	-27.2%
Atlanta, GA	50.3%	70.8%	-29.0%
Detroit, MI	49.3%	69.6%	-29.1%

Worst 6 Performing Cities by change in occupancy

City	2020 Occ	2019 Occ	% Change
Oahu Island, HI	19.3%	85.5%	-77.5%
New York, NY	38.5%	88.7%	-56.6%
Chicago, IL	34.9%	77.3%	-54.9%
San Francisco/San Mateo, CA	39.3%	87.1%	-54.9%
Minneapolis/St Paul, MN-WI	34.5%	76.0%	-54.6%
Orlando, FL	33.7%	72.5%	-53.4%

Source: STR

Atlanta Hotel Updates

After underperforming all hotel KPI’s last week, Atlanta hotel’s saw a large ~10% increase in all its KPI’s this week. This week kicked off a large number of active events celebrating various nationalities, sparking travel into the city. Atlanta occupancy increased by 10.2% compared to last week to 50.2% but was still down -29% compared to last year.

Recent Atlanta news by the Atlanta Convention and Visitors Bureau show that more than $10 billion in revenue has been lost so far and 80 percent of Atlanta’s downtown hospitality workers were forced out of work. Atlanta City Council President, Felicia Moore, cited 2 reasons for the large decline in revenue and hotel layoffs: safety concerning hotels and recent protests. Concerns about COVID-19 transmission caused the major trade show in August, AmericasMart, to tank as only 20% of the 50,000 out of town buyers showed up. On an optimistic end, a show set for October already has more than 4,000 people registered. Long-term recovery for hotels and events in Atlanta, however, continues to have a negative outlook from the Atlanta Convention and Visitors Bureau. They said we may not get back to 2019 occupancy/travel levels until 2023. With a negative outlook on travel into the city, the president of Atlanta Motor Speedway has been able to strengthen his case to build a $1 billion casino resort adjacent to the Atlanta Motor Speedway. The resort would feature a hotel, time-share condominiums, meeting space, shops and restaurants, and possibly a theme park, concert venue, movie theater, and nightclub. The site is estimated to create over 5,000 jobs which could attract lawmaker support when the 2021 legislative session begins in January.

Atlanta events still active:

• Atlanta Arab Festival, October 3-4 2020
• Elevate Atlanta, October 4-10 2020
• Atlanta Mimosa Festival, October 3 2020
• Atlanta Celebrates Photography, October 1-31 2020
• Georgia Latino Film Festival, October 1-4 2020
• Festival on Ponce, October 10-11 2020
• Oktoberfest Atlanta, October 9-10 2020

Major Atlanta events that were cancelled/moved virtual:

• VIRTUAL FESTIVAL Atlanta Pride Festival, October 9-11 2020
• VIRTUAL FESTIVAL ATL Hip Hop Day, October 3-4 2020
• CANCELLED Roswell Wine Festival, October 4 2020
• CANCELLED Monsterama, October 9-11 2020
• CANCELLED Chalktoberfest, October 10-11 2020
• CANCELLED North Georgia State Fair, September 24 – October 4 2020
• VIRTUAL FESTIVAL Out On Film, September 24 – October 4 2020
• VIRTUAL FESTIVAL AJC Decatur Book Festival, September 4 – October 4 2020

Week Of October 4th Hotel Report: Good And Bad News

Good News

Ritzy Buckhead Village apartments bought for almost $72 million

Atlanta Braves working to add hundreds of apartments, hotel rooms to Battery ATL

Atlanta Motor Speedway still hopeful for $1B casino resort

Bad News

P.F. Chang’s extends ‘reduction of work hours’ at Atlanta locations due to ongoing pandemic

Job rebound is ‘losing steam’ as crisis passes six-month mark

Atlanta faces $10 billion loss amid coronavirus pandemic, reports show