Hotel Industry Overview: 6/21-6/27
Hotel Weekly Update
Nationally, hotel occupancy was down 38.7% compared to 2019 this week. Atlanta was 5th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-35.3%).
Small Metro/Town (50.64%), Interstate (50.63%), and Resort (47.9%) hotels continue to be the best performing hotels in terms of occupancy for 2020. In 2019, the top 3 performing locations in terms of occupancy rate were Urban (92.1%), Airport (90.4%), and Resorts (87.8%). Hotels near urban areas and airports continue to experience the worst revenue declines due to COVID-19.
Week of June 21st Winners & Losers
Upscale (-49.8%), Upper Upscale (-67.9%), and Luxury (-72.1%) continue to have the worst occupancy declines. The decline is due to a large number of high room count hotels either reducing their staff significantly, therefore decreasing their maximum amount of hotel rooms available, or shutting down operations completely.
Large hotel brands which have a large number of midscale and upper midscale hotels in their portfolio, such as IHG, are expected to have the least closures and revenue losses– especially if those hotels are located near small towns and interstates. Independent and economy hotel owners, which primarily have locations near small towns, suburbs, and interstates, are starting to pick up more bookings as people have started traveling via automobiles.
Top 6 Performing Cities by change in occupancy
|City||2020 Occ||2019 Occ||% Change|
|Norfolk/Virginia Beach, VA||61.4%||82.1%||-25.2%|
|Tampa/St Petersburg, FL||51.1%||75.6%||-32.4%|
Worst 6 Performing Cities by change in occupancy
|City||2020 Occ||2019 Occ||% Change|
|Oahu Island, HI||15.0%||88.0%||-82.9%|
|San Francisco/San Mateo, CA||35.2%||88.1%||-60.0%|
Atlanta Hotel Updates
Local Atlanta attractions have been opened back up: Georgia Aquarium, Zoo Atlanta, Six Flags, and the Nantahala Outdoor Center to name a few. However, losing the spring season tourists have set these companies back tremendously in both early season revenue and in their ability to recruit, train and retain staff to make summer successful. Additionally the loss group travel has played a major impact on these attractions early season business. The city of Atlanta had accounted for 22 large groups to have events in the city during 2020, but cancellations have dropped the number to 13, with four of the thirteen having already occurred before the pandemic began affecting gatherings.
Nearly 240 conventions have been cancelled for this year or early 2021 according to the Atlanta Conventions & Visitors Bureau. The Georgia World Congress Center reported it lost two large events: The International Woodworking Fair and Big South Volleyball. The International Woodworking Fair attracts 20,000 to 30,000 people cancelled its August gathering, and Big South Volleyball initially planned a June event for thousands of young players that has a replacement event slated for July.
Major Recurring Events Cancelled/Postponed this week:
- Cancelled: Vegan Dark Food Festival, June 27 2020
- Cancelled: Conyers Caribbean Music & Food Festival, June 27 2020
- Cancelled: Atlanta Summer Beer Festival, June 27 2020
Week Of June 21st Hotel Report: Good And Bad News
Atlanta Moves 250 People Without Shelter Into Hotel To Protect From COVID-19 Virus
The ACVB is planning to launch a “staycation” program to try and increase demand for hotels and restaurants throughout the rest of the year.
Governor Brian Kemp has allowed conventions to start back up July 1st but must follow a 21 mandate safety guideline.
The Ritz-Carlton Reynolds, Lake Oconee reopened June 22nd
Xenia Hotels & Resorts Inc. (NYSE: XHR) entered into an agreement to sell the 522-room Renaissance Atlanta Waverly Hotel & Convention Center for $155 million to an unidentified buyer. The transaction was initially expected to close in March, but the closing of the deal has now been delayed until July 31. If the deal doesn’t close, the buyer will lose a $7.75 million non-refundable deposit
Atlanta hotels have seen nearly 700,000 room cancellations by groups since March, leading to a 48% drop in group room bookings compared to 2019.
COVID-19 Cases in Georgia have begun to spike