Hotel Industry: 8/09-8/15
Hotel Weekly Update
Nationally, hotel occupancy was down 30% compared to 2019 this week. Atlanta was 3rd out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-28.2%), up from last week’s ranking of 4th out of 25.
Small Metro/Town (57.5%), Interstate (53.9%), and Suburban (52.4%) hotels continue to be the best performing hotels in terms of occupancy for 2020. In terms of RevPar, Small Metro/Town (-16.8%), Interstate (-16.7%), and Suburban (-26.7%) hotels faired the best compared to Urban (-51.2%), Airport (-40.5%), and Resorts (-37.2%). Hotels that do not rely on business travel, leisure travel, or high traffic areas continue to have the best occupancy and profitability.
Week of August 9th Winners & Losers
Upscale (-38.9%), Upper Upscale (-59.2%), and Luxury (-65.7%) hotels recovered ~5% 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 -9.7% this week.
Top 6 Performing Cities by change in occupancy
| City | 2020 Occ | 2019 Occ | % Change |
| Norfolk/Virginia Beach, VA | 65.3% | 79.8% | -18.1% |
| Tampa/St Petersburg, FL | 48.6% | 65.3% | -25.6% |
| Atlanta, GA | 49.4% | 68.8% | -28.2% |
| Phoenix, AZ | 44.3% | 62.8% | -29.4% |
| Philadelphia, PA-NJ | 52.7% | 75.2% | -30.0% |
| Houston, TX | 39.3% | 58.7% | -33.0% |
Worst 6 Performing Cities by change in occupancy
| City | 2020 Occ | 2019 Occ | % Change |
| Oahu Island, HI | 22.8% | 92.3% | -75.3% |
| Boston, MA | 32.6% | 82.8% | -60.6% |
| Seattle, WA | 36.9% | 85.3% | -56.7% |
| Orlando, FL | 29.9% | 66.9% | -55.3% |
| San Francisco/San Mateo, CA | 41.1% | 90.0% | -54.3% |
| New York, NY | 41.1% | 89.7% | -54.1% |
Source: STR
Atlanta Hotel Updates
InterContinental Hotels Group announced 650 job losses from its main offices with more expected in its worldwide hotels after the “toughest first half” in its history. Keith Barr, IHG’s chief executive, warned that 10% of its corporate workforce may be cut despite IHG’s 3,500 economy hotels operating above 50% occupancy levels. For a comparison, the top 3 hotel chains RevPar (preferred industry sales metric) during the second quarter of 2020 was:
- IHG: -75%
- Marriott: -84%
- Hilton: -81%
Major hotel brands and STR data points show that although domestic and small distance travel has increased in the short term due to travel restrictions being lifted, high capacity hotels will have a challenging road ahead as group bookings, events, and long haul travel lag in recovery.
In Atlanta, despite COVID-19 cases continuing to rise, College Park will gain 2 new Hilton hotels: Home2 Suites and Tru Hotel. Home2 Suites will target families and extended-stay guests with 188 king and queen studio and one-bedroom suites. Tru Hotel aims to draw business travelers with a modern 2,857-square-foot multipurpose lobby, fitness center, and 126 single king and double queen rooms complete with mobile desks and task chairs. College Park is planning to add roughly 12,000 to 13,000 more hotel rooms over the next five to eight years. With the initial opening target of February 2022, Atlanta Hotel Group expects a vaccine for COVID-19 to allow occupancy levels and profitability for urban hotels to go back to pre-pandemic levels.
Week Of August 9th Hotel Report: Good And Bad News
Good News
1,100-acre, $200M wellness resort proposed west of Atlanta
College Park will gain 2 new Hilton hotels
Bad News
IHG set to cut jobs as it falls to $275m loss
Delta could furlough 800-plus Atlanta-based pilots
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