Hotel Industry Overview: 6/7-6/13

Hotel Weekly Update

Nationally, hotel occupancy was down 43.4% compared to 2019 this week. Atlanta was 6th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-42.30%), a decline from the #3 spot held at the end of May. Overall, occupancy rates appear to be improving slightly each week as leisure travel ramps up, and more hotels begin to open their doors.

Shown below, Atlanta outperformed the national average over the weekends and stayed relatively in-line with the US average for the first time during the weekdays. Due to Juneteenth gatherings on June 13th, Atlanta was able to achieve the lowest decline in occupancy rates, -30%, since the end of March when the occupancy declines started.

Urban hotels across the United States had the largest amount of vacant rooms this week. During this week in 2019, urban hotels had the largest occupancy percentage out of all location types, reaching a weekly high of 96.1% June 9th, 2019. The two location types, interstate and small metro/town, had the lowest occupancy rates in 2019 but now are the hotel location type leaders during the pandemic.

Source: STR

Week of June 7th Winners & Losers

A modest recent gain in hotel room rentals is attributed to leisure travelers staying in rooms within driving distance of their homes. That means luxury and large hotels are left empty at higher rates than motor hotels and extended stay hotels, though the smaller hotels are struggling too.

Location wise, hotels in densely populated areas or hotels closely tied with tourism and travel (airports & resorts) are experiencing the largest occupancy drops. Hotels located along automobile travel routes (interstates) and less densely populated areas (small metro/towns & suburbs) have had the best occupancy recovery.

Top 6 Performing Cities by change in occupancy

City	Occupancy 2020	Occupancy 2019	% Change
Phoenix, AZ	47.60%	63.80%	-25.40%
Norfolk/Virginia Beach, VA	53.30%	76.40%	-30.20%
Houston, TX	40.30%	64.70%	-37.70%
Tampa/St Petersburg, FL	44.70%	72.40%	-38.20%
Detroit, MI	43.70%	73.10%	-40.10%
Atlanta, GA	43.20%	74.90%	-42.30%

Worst 6 Performing Cities by change in occupancy

City	Occupancy 2020	Occupancy 2019	% Change
Oahu Island, HI	10.80%	89.50%	-88.00%
Boston, MA	25.70%	83.40%	-69.10%
Orlando, FL	26.40%	76.90%	-65.60%
San Francisco/San Mateo, CA	31.70%	89.40%	-64.60%
Seattle, WA	31.50%	86.60%	-63.60%
Minneapolis/St Paul, MN-WI	29.70%	79.90%	-62.80%

Source: STR

Atlanta Hotel Updates

Nearly 240 conventions scheduled for this year or early 2021 have been canceled, according to the Atlanta Convention & Visitors Bureau. There’s hope Gov. Brian Kemp’s executive order last week allowing conventions to restart with restrictions in July will help but a full recovery will take a year

Atlanta’s 15th largest hotel is permanently or temporarily laying off 121 employees. The Grand Hyatt Atlanta in Buckhead notified the Georgia Department of Labor it will permanently lay off 46 employees, convert 75 furloughs to temporary layoffs without employment benefits and extend some employee furloughs with employment benefits according to a June 1 letter from General Manager Scott Snipes to GDOL Supervisor Crystal Davis.

Other large ATL hotels that have sent in recent letters to the GDOL are the Atlanta Marriott Marquis, which laid off nearly 800 people; the Ritz-Carlton on Lake Oconee, which let 440 workers go and the Westin convention hotel in Savannah, which dismissed 244 employees.

Major Recurring Events Cancelled/Postponed this week:

• Moved Online: Atlanta Fringe Festival, June 1-7 2020
• Canceled: Alpharetta Brew Moon Fest, June 6, 2020
• Rescheduled to November: Virginia-Highland Summerfest, June 6-7 2020
• Canceled: Flying Colors Butterfly Festival, June 6-7 2020
• New Fall Dates TBC: Peachtree Corners Festival, June 12-14 2020
• Canceled: American Hydrangea Society’s Annual Garden Tour, June 13, 2020
• Canceled: Roswell Lavender Festival, June 13, 2020

Source: STR

Week Of June 7th Hotel Report: Good And Bad News

Good News

Downtown, the reopening of the Georgia Aquarium Monday, June 15 is expected to help draw more hotel stays

Travel rates have started to increase and Georgia bars have reopened

The Barnsley Resort, about an hour drive from Atlanta, reopened Friday, June 12, with new sanitation procedures, social distancing measures, and reduced capacity.

Bad News

The Ritz-Carlton Hotel Co LLC, doing business as The Ritz-Carlton Reynolds, Lake Oconee, instituted temporary furloughs, layoffs and hours reductions for 400 of its 445 employees beginning on March 16, according to a June 3 letter to GDOL.

The mass layoff of 107 employees at the Atlanta Marriott Northeast/Emory Area took place in March and April, according to an April 30 letter from Hospitality Ventures Management – Century Center LLC to the Georgia Department of Labor. As of June 2nd, the hotel remains open, but it has closed four of its 13 floors.