Hotel Industry: 8/16-8/22

Hotel Weekly Update

Nationally, hotel occupancy was down 30.3% compared to 2019 this week. Atlanta was 5th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-29.7%), down from last week’s ranking of 4th out of 25.

Nationally, small metro/town and interstate hotels saw large occupancy increases as people evacuated from wildfires in California as well as hurricanes in the Gulf. Universities started having classes this week as well drawing more people to hotels located around their college campuses. Urban, airport, and resort hotels continue to suffer the largest occupancy drops due to COVID-19.

Week of August 16th Winners & Losers

Upscale (-39.3%), upper upscale (-60.4%), and luxury (-64.7%) hotels experienced slight occupancy declines compared to last week and continue to be the worst-performing chain scale segments of hotels. Lodging and travel preferences were geared to staying in hotels that have the chain segments of economy, independent, midscale, or upper-midscale that were located in or around interstates and small towns. Big cities and popular vacation spots such as New York, Miami, and Oahu Island continue to post above 50% declines as most people are conducting business virtually or planning vacations to more local areas.

Top 6 Performing Cities by change in occupancy

Cities	2020 Occ	2019 Occ	% Change
Norfolk/Virginia Beach, VA	61.20%	79.70%	-23.30%
Tampa/St Petersburg, FL	48.90%	67.50%	-27.50%
Detroit, MI	50.30%	69.90%	-28.10%
Phoenix, AZ	45.00%	63.50%	-29.10%
Atlanta, GA	46.60%	66.40%	-29.70%
San Diego, CA	54.10%	80.50%	-32.80%

Worst 6 Performing Cities by change in occupancy

Cities	2020 Occ	2019 Occ	% Change
Oahu Island, HI	26.50%	89.40%	-70.30%
New York, NY	36.30%	88.10%	-58.80%
Minneapolis/St Paul, MN-WI	36.10%	85.10%	-57.60%
Orlando, FL	29.30%	68.10%	-57.00%
Boston, MA	35.20%	81.20%	-56.70%
Seattle, WA	38.90%	84.60%	-54.00%

Source: STR

Atlanta Hotel Updates

Recently, Gov. Kemp signed a variety of bills that will be affecting hotels operations:

• Safe Harbor Legislation: SB359
• Alcohol Three Tier Update: HB879 & HB674
• Ride-Sharing/ Hotel-Motel Fees: HB105
• Employer Prohibitions and Workplace Mandates: SB 408

The most important bill, SB359, will allow hotels to not be liable if guests contract COVID-19 on their property as long as CDC guidelines are followed and proper signage is posted. The alcohol three tier update will start to allow businesses to apply to be able to deliver alcohol– opening new supplemental revenue streams for hotels. HB105 was signed into effect to allow hotels and motels to waive income taxes when residents fleeing from natural disaster stay in the hotels/motels. SB 408 mandates employers must allow employees to take time to care for immediate family members that are sick. These bills will help hotels by reducing legislation risk associated with COVID-19, add additional income and tax savings from pursuing alternative revenue streams (alcohol sales and incentivizing housing for hurricane victims), and protect hotel employee’s by allowing them to prioritize sick family members.

All Atlanta universities reopened this week using a hybrid or virtual platform to deliver education. As students moved in, Atlanta hotels say a large rise in occupancy towards the end of the week, but at the expense of profitability compared to national averages (ADR & RevPar). Colleges play a pivotal role in the Atlanta economy aside from family visiting students. College football games, especially bowl games, drive large economic activity for the city. A study from Georgia State professor Bruce Seaman shows the Chick-fil-A Peach Bowl brought in over $58 million of economic impact in 2019.

Week Of August 16th Hotel Report: Good And Bad News

Good News

COVID-19 Liability Protections for Georgia Businesses

Atlanta universities have reopened and are expected to allow limited attendance to sporting events

Bad News

Twenty-nine of 32 scheduled citywide conventions post-March have been canceled due to the Covid-19 pandemic, resulting in losses of $640 million

AmericasMart convention wrapped up Aug. 18, meaning the next scheduled citywide convention is the SEC Championship game at Mercedes-Benz Stadium — on Dec. 19.