Hotel Industry Overview: 5/17-5/23

Weekly Hotel Update

Nationally, hotel occupancy was down 50.20% compared to 2019.  Atlanta was 4th out of the 25 biggest lodging markets in the US for the least occupancy rate declines (-47.5%) for the second time this month.  Many public hotel brands such as InterContinental, Hilton, and Marriott have started to reopen their hotels with an emphasis on cleanliness.  Some new initiatives are the Global Cleanliness Council (Marriott), CleanStay Program (Hilton), and AHLA’s Safe Stay standards.  

On the graphs below, Atlanta has still outperformed national occupancy rate standards despite taking an average ~47% decline in occupancy each day compared to 2019.  

Week of May 17th Winners & Losers

As shown in the graph below, the economy and midscale hotels have been able to perform the best in terms of chain scale segments. Luxury, upper-upscale, and upscale hotels still suffer from a lack of business travel, conventions/major city events, and high-end leisure travel.

Top 5 Performing Cities by change in occupancy

Worst 5 Performing Cities by change in occupancy

Atlanta Hotel Updates

Atlanta saw some of its hotels open its doors for the first time this week such as Four Seasons (opened May 15th).  Four Seasons originally had furloughed 109 of its employees on March 23rd.  Omni also opened its hotels with the implementation of their new Safe & Clean program.  The Sheraton Atlanta, ranking No. 6 with 763, closed on April 7 and targets a June 1 reopening, according to the ACVB.  Other ACVB member hotels that temporarily suspended operations are Loews Atlanta Hotel, The Candler Hotel Atlanta, and The American Hotel Downtown at Atlanta Downtown.  Barnsley Resort in Adairsville and Great Wolf Lodge Georgia were also among the closings reported by ACVB, but have reopened on May 19th.

A driving force of the Atlanta hotel market is the city’s conventions, trade shows, and major events it holds.  This week, Buckhead Theatre, Ameris Bank Amphitheatre, Cadence Bank Amphtithere, Lakewood Amphitheatre, Variety Playhouse, and the Tabernacle along with other concert venues have continued to cancel/postpone events.  Some major Atlanta events that were canceled this week were the CFA Institute Conference (1000-5000 participants), Shaky Beats (~32,000 participants), and MomoCon.  MomoCon– one of the largest gaming, animation, and comic conventions– was supposed to take place May 17th to May 24 and attract ~40,000 unique visitors and ~120,000 turnstile visitors (rescheduled to May 27th, 2021).  For further insight into other Atlanta event/hotel closures follow this link.

Over the week of May 17th, Atlanta was able to perform slightly better than the national average with respect to occupancy rate and RevPar declines whilst comparatively declining marginally more than the national average in ADR. This comes despite the loss of music, trade show, and convention travel into the city.

Week Of May 17th Hotel Report: Good And Bad News

Good News

Restaurants and historic shopping districts (Ponce City Market & Krog Street) reopened May 22nd

AHLA has revamped hotel safety standards along with most hotel brands using money saved from furloughs and lay-offs to ensure hotels safe and cleanliness

Several large Atlanta hotels have reopened this week

Bad News

Most big events and conferences have been postponed or canceled that were scheduled during the month of May

Atlanta Food & Wine Festival have postponed their May culinary gathering

For 2 independent hotels in Atlanta, ~95% of hotel staff on all levels have been furloughed until demand picks back up

In the Atlanta metro area, 211 hotel properties have more than $2 billion in CMBS loan debt, according to Bloomberg data. Atlanta has the third-highest number of hotels in a metro area, behind Dallas and Houston, Texas.