Hotel Industry: 8/23-8/29

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

City2020 Occ2019 Occ% Change
Norfolk/Virginia Beach, VA60.60%69.40%-12.70%
Houston, TX51.00%59.30%-14.10%
Dallas, TX49.70%65.00%-23.60%
Tampa/St Petersburg, FL44.60%58.70%-24.00%
Detroit, MI49.90%68.00%-26.60%
Phoenix, AZ44.30%62.40%-28.90%

Worst 6 Performing Cities by change in occupancy

City2020 Occ2019 Occ% Change
Oahu Island, HI26.60%83.70%-68.20%
New York, NY37.20%90.50%-59.00%
Seattle, WA37.30%83.90%-55.50%
Minneapolis/St Paul, MN-WI35.70%78.80%-54.70%
Nashville, TN35.20%76.50%-54.10%
Boston, MA38.00%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

Georgia World Congress Center leads convention industry in cleaning changes aimed at building confidence

 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

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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