Hotel Industry: 7/19-7/25

Hotel Industry: 7/19-7/25

Hotel Weekly Update

Nationally, hotel occupancy was down 37.9% compared to 2019 this week. Atlanta was 3rd out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-33.3%).

Small Metro/Town (54.9%), Interstate (53.2%), and Suburban (49.1%) 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 (93%), Airport (91.5%), and Resorts (90.5%). Hotels near urban areas and airports continue to experience the worst revenue declines due to COVID-19.

Week of July 19th Winners & Losers

Upscale (-47.6%), Upper Upscale (-67.2%), and Luxury (-72.7%) continue to have the worst occupancy declines. The large declines continue to be due to a large number of high room count hotels reducing their staff significantly and consumer and corporation travel preferences. Many corporations have adapted to virtual conferences and meetings, and individual travel preferences have shifted towards more rural attractions.

Top 6 Performing Cities by change in occupancy

City2020 Occ2019 Occ% Change
Norfolk/Virginia Beach, VA66.1%82.7%-20.1%
Detroit, MI55.2%81.4%-32.1%
Atlanta, GA50.5%75.8%-33.3%
Phoenix, AZ42.2%63.7%-33.7%
Tampa/St Petersburg, FL48.1%75.8%-36.5%
Philadelphia, PA-NJ50.4%81.2%-38.0%
Source: STR

Worst 6 Performing Cities by change in occupancy

City2020 Occ2019 Occ% Change
Oahu Island, HI22.7%86.9%-73.8%
Boston, MA31.8%89.3%-64.3%
Seattle, WA35.1%91.3%-61.6%
Miami/Hialeah, FL30.7%78.8%-61.0%
New York, NY36.3%92.7%-60.8%
Orlando, FL32.0%80.1%-60.1%
Source: STR

Source: STR

Atlanta Hotel Updates

Delta’s CEO, Ed Bastian, said business travel may lag for 12 to 18 months during Delta’s most recent earnings call. For hotels classified as conference centers, upper-upscale, and luxury hotels this will prove to be a huge blow to occupancy. For these hotels, revenue is driven by group travel and business travel, and with these segments experiencing a slow recovery, the hotels must find creative ways to book rooms. Currently, some Atlanta hotels have been booking rooms by housing marine recruits for quarantine purposes until they move to basic training at Parris Island. Other hotels have been negotiating with schools to house students that have contracted COVID-19 until they are clear of the virus. Despite this, many hotels have issued statements saying upwards to 60-80% of the staff has been laid off due to COVID-19.

Atlanta Reopening’s:

  • Radisson opens a new hotel minutes away from Hartsfield-Jackson Atlanta International Airport on July 15th
  • Buckhead bars are starting to reopen their doors July 24th-July25th
  • World of Coca-Cola reopened July 15th
  • Cobb Galleria reopened July 13th
  • Sylvania and Plains Visitor Centers plans to reopen July 21st under Georgia State Parks Management

Major Recurring Events Cancelled/Postponed this week:

  • Moved Online: Atlanta Ice Cream Festival
  • Canceled: Candler Park Music Festival (Rescheduled to June 2021)
  • Canceled: Imagine Music Festival (Rescheduled to September 2021)
  • Canceled: Georgia Carolina State Fair (Rescheduled to October 2021)

Week Of July 19th Hotel Report: Good And Bad News

Good News

Tax Credits: HB 1035 would reduce the value of all existing tax credits and
exemptions by 10 percent for a one-year period including those that GHLA had long advocated for and hotels had benefited from. This bill failed to pass the Senate.

Delta adding nearly 1,000 flights in July with focus on summer, business destinations

Marines move Parris Island recruits from The Citadel to Atlanta Hotels for coronavirus quarantine

Bad News

Ansley Golf Club closes after 67 employees test positive for COVID-19

Atlanta Reverted Back to Phase I reopening

On July 16th, Governor Kemp filed a lawsuit asking a judge to overturn the Atlanta Mayor’s COVID-19 order by citing that the order is more restrictive than Kemp’s, block her from issuing any more such orders, and instruct the City Council not to ratify Bottoms’ actions or adopt any ordinances inconsistent with Kemp’s orders

Photo of an undetermined Georgia Tech home game during the 1918 college football season. That's when the sport was hit by the Spanish flu and the end of World War I.

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