Hotel Industry: 7/26-8/01

Hotel Industry: 7/26-8/01

Hotel Weekly Update

Nationally, hotel occupancy was down 34.5% compared to 2019 this week. Atlanta was 4th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-28.4%).

Small Metro/Town (55.8%), Interstate (53.6%), and Suburban (50.8%) 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%), Airport (~90.5%), and Resort (~90%) hotels. Hotels near resorts and airports have started to recover at faster rates than urban hotels suggesting leisure travel has started to come back with a preference slanted away from highly populated areas.

Week of July 26th Winners & Losers

Upscale (-44%), Upper Upscale (-64.3%), and Luxury (-70.7%) hotels recovered ~3% of occupancy compared to last week but continue to field the biggest declines. Economy hotels have had the fastest recovery with occupancy rates being only down -13.7% this week.

Top 6 Performing Cities by change in occupancy

City2020 Occ2019 Occ% Change
Norfolk/Virginia Beach, VA64.10%80.70%-20.60%
Phoenix, AZ44.70%58.70%-23.90%
Detroit, MI54.30%74.40%-27.10%
Atlanta, GA49.60%69.30%-28.40%
Tampa/St Petersburg, FL49.10%73.10%-32.90%
Philadelphia, PA-NJ51.40%78.70%-34.70%
Source: STR

Worst 6 Performing Cities by change in occupancy

City2020 Occ2019 Occ% Change
Oahu Island, HI21.40%88.00%-75.70%
Boston, MA32.70%85.10%-61.60%
Orlando, FL30.30%77.40%-60.90%
New York, NY36.10%90.10%-60.00%
Seattle, WA37.00%84.90%-56.40%
Miami/Hialeah, FL33.00%75.10%-56.10%
Source: STR

Source: STR

Atlanta Hotel Updates

This week Massachusetts-based Service Properties Trust (Nasdaq: SVC) said July 23 that it has sent a notice of default and termination to Atlanta’s InterContinental Hotels Group (NYSE: IHG) as a result of IHG’s alleged failure to pay SVC approximately $8.4 million for the month of July. SVC manages 103 IHG hotels. SVC said its contract requires IHG to pay an annual minimum of returns and rents of $216.6 million and the contract is currently set to expire in 2036.

On the positive end, Midtown Atlanta has continued to have a steady pace of hotel construction– spurred by Noble Investment Group’s dual-branded hotel. The hotel will be 14 stories tall, located at the corner of Peachtree Street and Ponce de Leon Avenue. The hotel combines the Courtyard by Marriott and Element by Westin brands, with each brand’s room and suite design featuring a distinctive vibe. The Courtyard’s 158 rooms will have “smart, casual decor,” while the Element’s 124 suites will be nature-inspired spaces with fully-equipped kitchens and spa-inspired bathrooms. It will top out by the end of September and is slated to open July 1, 2021.

Major Recurring Events Cancelled/Postponed this week:

  • Cancelled: Atlanta Comic Con, July 31 – August 2, 2020

Week Of July 26th Hotel Report: Good And Bad News

Good News

State pauses lawsuit over Atlanta’s enhanced COVID restrictions

The temporary hospital at the Georgia World Congress Center will open on August 3rd, with 60 available beds that can be increased to 120 beds if necessary

College Football Hall of Fame reopens

Sweet Auburn Springfest slated to continue as expected on August 1-2 2020

Bad News

Governor Kemp extended Georgia’s state of emergency to September 10, along with the state’s current coronavirus restrictions (no gatherings of more than 50 people and a shelter-in-place order for the elderly and those with underlying conditions) through August 15.

Smaller metro Atlanta cities, including College Park and Union City, say they need federal assistance in order to survive. The loss of income from hotel tax has been a huge hit for these cities, and the mayors are asking for help from the second round of the CARES Act.

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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