Hotel Industry: 8/23-8/29
Hotel Weekly Update
Nationally, hotel occupancy was down 23.2% compared to 2019 this week. Atlanta was 10th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-34.1%), down from last week’s ranking of 5th out of 25. With Atlanta hotel occupancy being driven by conventions, large events like sports games, and business travel, the short-term recovery for hotels is bleak as almost all scheduled conventions have been canceled, business being conducted virtually, and sporting events having limited in-person attendance.
As the week progressed, occupancy rates plummeted as business travel is halted and sporting events have limited attendance. Small Metro/Town (54.2%), Interstate (51.1%), and Suburban (50.9%) hotels continue to be the best performing hotels in terms of occupancy for 2020.
Week of August 23rd Winners & Losers
Upscale (-35.8%), upper upscale (-57.6%), and luxury (-63.7%) hotels recovered ~3% compared to last week but continue to be the worst-performing chain scale segments of hotels. The best performing hotels this week have the chain scale segment of economy, independent, or midscale and are located in small towns or interstates.
Top 6 Performing Cities by change in occupancy
| City | 2020 Occ | 2019 Occ | % Change |
| Norfolk/Virginia Beach, VA | 60.60% | 69.40% | -12.70% |
| Houston, TX | 51.00% | 59.30% | -14.10% |
| Dallas, TX | 49.70% | 65.00% | -23.60% |
| Tampa/St Petersburg, FL | 44.60% | 58.70% | -24.00% |
| Detroit, MI | 49.90% | 68.00% | -26.60% |
| Phoenix, AZ | 44.30% | 62.40% | -28.90% |
Worst 6 Performing Cities by change in occupancy
| City | 2020 Occ | 2019 Occ | % Change |
| Oahu Island, HI | 26.60% | 83.70% | -68.20% |
| New York, NY | 37.20% | 90.50% | -59.00% |
| Seattle, WA | 37.30% | 83.90% | -55.50% |
| Minneapolis/St Paul, MN-WI | 35.70% | 78.80% | -54.70% |
| Nashville, TN | 35.20% | 76.50% | -54.10% |
| Boston, MA | 38.00% | 79.70% | -52.40% |
Source: STR
Atlanta Hotel Updates
Facebook, Microsoft, and Macy’s announced they are locating offices at Atlantic Station over this past summer, which is expected to create an influx of new business travelers to Atlanta. Microsoft’s $75 million office is expected to bring in 1,500 new tech jobs, Macy’s $14 million tech hub will employ over 600, and Facebooks’ $750 million data center will employ over a 100 for its first phase. The announcements led to 2 new hotels being built at Atlanta Station– 130-room SpringHill Suites and 144-room Tapestry by Hilton. The hotels are being built by Peachtree Hotel Group for a price tag of $85.5 million. Another hotel, Embassy Suites Atlantic Station (186-room hotel), has already been under construction and is expected to open in early 2021 to supplement Atlantic Stations only current hotel– Twelve Midtown (120 rooms).
Atlanta hotel occupancy has dropped below the national average for the first time this year by a rate of more than 1%. The short-term health of Atlanta hotels look bleak with the next big convention in Atlanta, the SEC Championship, scheduled for December and the most recent convention, AmericasMart, wrapping up on August 18th.
Week Of August 23rd Hotel Report: Good And Bad News
Good News
Atlantic Station adds hotels to meet expected increase in business travel
Bad News
Service Properties Trust confirms it will transfer 103 hotels away from Atlanta-based IHG
All sports games in the city have limited attendance
Coronavirus outbreaks at college campuses
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