Hotel Industry: 9/20-9/26
Hotel Weekly Review
Nationally, hotel occupancy was down 29.5% compared to 2019 this week. Atlanta was 2nd out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-26.8%), up from last week’s ranking of 6th out of 25.
Nationally, hotel occupancy rates by location deteriorated compared to last week. The only hotel location that experienced week over week growth was small metro/towns hotels increasing by 110bps (Week of 9/20 -16.1% occupancy declines vs. Week of 9/13 -17.2% occupancy declines). Resort and urban hotel occupancy rates declined -6.6% and -4.5% this week compared to last week (9/13).
Week of September 20th Winners & Losers
For chain scale segments, economy and midscale hotels continue to have the lowest occupancy declines as well as low ADR declines (-7.2% and -10.4% respectively). Upper-upscale hotels are in the worst position during the pandemic as have the worst room pricing power (-34.2% ADR decline) and 2nd largest demand deficit (-65.9% occupancy rate decline). Luxury hotels, although having -71.7% drops in occupancy rates, had only a -25.5% drop in ADR (5th out of the 7 chain scale segments)– indicating strong pricing ability for luxury hotels despite large room demand declines.
The worst-performing hotel locations in terms of overall occupancy compared to last year are urban (34.1% occupancy), resort (38.1%), and airport (44.2%) hotels had occupancy declines of -57.8%, -45.1%, and -43.1% respectively compared to the same week last year.
The best performing hotel market, Norfolk/Virginia Beach (-12.4% occupancy decline this week compared to 2019), saw an ~3% occupancy recovery compared to last week. In the United States, the island, northeastern city, and vacation city hotel markets experienced further occupancy declines across the board. The market with the lowest occupancy level, Oahu Island, had a -87.9% occupancy decline compared to last year with the current rate being 10.2% (approximately 10% lower than last week).
Top 6 Performing Cities by change in occupancy
| City | 2020 Occ | 2019 Occ | % Change |
| Norfolk/Virginia Beach, VA | 55.9% | 63.8% | -12.4% |
| Atlanta, GA | 49.4% | 66.5% | -25.8% |
| Tampa/St Petersburg, FL | 48.3% | 65.6% | -26.3% |
| Detroit, MI | 50.4% | 73.3% | -31.3% |
| Phoenix, AZ | 47.8% | 71.0% | -32.7% |
| Houston, TX | 41.7% | 65.1% | -35.9% |
Worst 6 Performing Cities by change in occupancy
| City | 2020 Occ | 2019 Occ | % Change |
| Oahu Island, HI | 10.2% | 84.3% | -87.9% |
| New York, NY | 27.2% | 94.6% | -71.2% |
| San Francisco/San Mateo, CA | 29.5% | 91.5% | -67.7% |
| Orlando, FL | 25.3% | 67.2% | -62.3% |
| Boston, MA | 32.8% | 83.7% | -60.8% |
| Chicago, IL | 32.7% | 80.6% | -59.4% |
Source: STR
Atlanta Hotel Updates
In Atlanta, a new hotel, Sonesta Atlanta Northwest Galleria Hotel, opened on September 24th. The hotel features a 400 person conference room, a 24/7 fitness center, and indoor and outdoor pools along with being located minutes away from Truist Park. Despite COVID-19’s effect on hotels, the new hotel is expected to pick up occupancy from the Atlanta Braves allowing visitors to watch the game in the stadium as well as outside. If the Braves continue winning, then the hotel is expected to gain more occupancy from the World Series. Additionally, M&A activity outside of Atlanta’s city perimeter is increasing as Crescent recently bought a hotel in the suburban mixed-use development shopping mall Avalon– capitalizing on the trend of consumer travel to less densely populated locations.
Despite the cancellation of large popular music festivals such as Music Midtown and Imagine being canceled, Atlanta hotels outperformed the US national average in all KPI’s. These festivals, in recent times, have brought in large tourist traffic into Atlanta but the guest stays from these events are concentrated around Airbnb’s and event campsites rather than hotels. New events such as the Buckhead Fine Arts Festival and Atlanta Bird Fest brought in hotel reservations into the city.
Atlanta events still active:
- Buckhead Fine Arts Festival, September 19-20 2020
- Atlanta Bird Fest, September 19 – October 18 2020
Major Atlanta events that were cancelled/moved virtual:
- CANCELLED Imagine Music Festival, September 18-20 2020
- CANCELLED Music Midtown, September 19-20 2020
Week Of September 20th Hotel Report: Good And Bad News
Good News
Sonesta Atlanta Northwest Galleria Hotel Opens (September 24th)
Crescent acquires the Hotel at Avalon in Alpharetta
Mayor Bottoms ‘hopeful’ city will soon move to Phase 3 of reopening
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