Market Recovery Monitor - 23 April 2022

After its typical pre-Easter slowing, the U.S. hotel industry rebounded with occupancy of 65.8% during 17-23 April 2022. That level was 2.9 percentage points away from the 2019 comparable, while Easter Sunday occupancy topped the holiday Sunday in 2019. From there, occupancy averaged 3.7 percentage points less than in 2019 with the weekend just two percentage points lower. Of note, occupancy has been 3.5 percentage points or fewer from 2019 levels for the past six consecutive weeks, which is the longest streak since the start of the pandemic. Average daily rate (ADR) continued to be well above 2019 with the week’s level 15% higher (2% higher when adjusting for inflation). The same was seen with revenue per available room (RevPAR), which was 11% higher than in the comparable week of 2019 (-2% when adjusted for inflation).

U.S. weekly occupancy was the 10th highest of the pandemic era thus far. The Florida Keys (86.7%) led the nation followed by Charleston (80.8%) and Savannah (80.2%). Other notable occupancy levels were observed in Orlando (78.9%), which hosted The Cheerleading Worlds 2022, and New York City (78.5%), which recorded its third best level of the era. Of NYC’s 10 highest pandemic-era occupancy levels, six have occurred in the past six weeks.

Weekend (Friday & Saturday) occupancy (78.2%) was at its highest level since early October 2021. Washington, D.C. and Charleston were among the seven markets that reported their highest weekend occupancy of the pandemic era. Charleston had the best weekend occupancy (93.4%) of any market with nine others above 90% including Austin, Orlando, and San Diego. Palm Springs, the submarket where the Coachella Music and Arts Festival is held, saw its third highest weekend occupancy (89.0%) of the pandemic-era after recording its highest level (94.9%) in the prior week (weekend 1 of the festival). California’s wine country also saw strong weekend occupancy with both Napa (90.7%) and Santa Rosa/Sonoma (91.0%) posting their highest weekend occupancy levels since March 2020. Nationally, this past weekend was the 10th best of the pandemic era. Room demand, however, was the seventh highest of the era and the highest of this year and of the past 28 weeks.

Weekday (Monday-Wednesday) occupancy (63.3%) rose slightly from the previous week. Among the Top 25 Markets and Central Business Districts (CBD), weekday occupancy fell slightly post-Easter but still ranked among the best of the pandemic-era. At 67.3%, Top 25 weekday occupancy was the fifth highest, while CBDs (63.6%) reported their sixth best. With the 126th running of the Boston Marathon, Boston saw its highest weekday occupancy (72.1%) since March 2020. Los Angeles and Washington, D.C. reported their second-best weekday occupancies of the pandemic-era. Shoulder (Sunday & Thursday) occupancy was flat due to a decline on Easter Sunday as is normal.

Looking at only Tuesday through Thursday, Top 25 Market occupancy surged to 71.8%, which was the highest level for those three days since just before the pandemic. The same was true for the CBDs where occupancy reached 69.2%.

ADR continued to surprise. This week’s level (US$148) was 15% higher than the comparable week of 2019, and nearly every STR-defined U.S. market (156 of 166) reported an ADR that was higher than in the same week of 2019. Thirteen markets reported their highest ADR of the pandemic-era, the most since the beginning of the year. Weekly ADR for the Top 25 Markets (US$176) was the third highest of the pandemic era. For CBDs, this week’s ADR (US$227) was the second best.

On an inflation-adjusted basis, weekly real ADR was two percent higher than in the comparable week of 2019. This was the 13th time that real ADR surpassed 2019 since the start of the pandemic. Ninety markets saw their weekly real ADR surpass 2019.  

While weekly RevPAR was only the 7th highest of the pandemic-era, there were some notable results. The Top 25 Markets saw weekly RevPAR reach its third highest level since the start of the pandemic with the weekend and Tuesday through Thursday at their highest level of the pandemic-era. For CBDs, the week was its second best with weekend RevPAR reached its highest level yet. Six markets, including Boston, reported their highest RevPAR since early March 2020. Overall, 126 of the 166 markets saw weekly RevPAR surpass 2019 levels, which is the most since the beginning of the year. Real RevPAR was above 2019 in 77 markets.

Over the past 28 days, 70% of markets were at “peak” RevPAR (RevPAR indexed to 2019 above 100) with 27% in “recovery” (RevPAR indexed to 2019 between 80 and 100) and just 3% in “recession” (RevPAR indexed to 2019 between 50 and 80). Real RevPAR was at “peak” in 40% of markets. The good news is that even on an inflation-adjusted basis, there are no markets in “depression” (RevPAR indexed to 2019 below 50).

Around the Globe
Outside of the U.S., occupancy decreased by a marginal 0.2 percentage points from the previous week to 55.8%. ADR fell 1.9% to US$128, resulting in a 2.2% RevPAR decline. Fifty-three of the countries tracked on a weekly basis saw a week-over-week drop in occupancy – a regression compared with the week prior.  

New Zealand saw a strong occupancy boost, up 9.6 percentage points week on week to 47.6% as it opened its border to fully vaccinated Australian visitors on 13 April 13 after two years of closure. Israel also saw a boost in performance, with occupancy up 13.9 percentage points to 70.1%, coupled with a 10.3% ADR increase due to Passover. China occupancy levels showed continued recovery, up 1.2 percentage points, although that was prior to the announcement that Beijing was going into lockdown.  

Curaçao achieved the highest weekly occupancy in the world at 82.1%, followed by Puerto Rico at 82.0%. Northern Europe again saw the highest occupancy (69.2%) of any sub-continent with Northern Africa the lowest (41.4%). 

Dubai’s occupancy fell to 60.5% as Ramadan held back visitors. Mestre & Venice achieved its highest weekly occupancy and ADR since the start of the pandemic via Venice Biennale. Rio de Janeiro also saw strong ADR growth, up 31.3% for the week.  

Over the past 28 days, 23% of non-U.S. markets remained in “Recession” with another 13% in “Depression.” This is a slight improvement on the prior week’s performance. 

Big Picture
The upcoming week is expected to be flat to slightly up based on previous year’s results. However, several big events including the New Orleans Heritage and Jazz Festival are kicking off, which could boost performance ahead of the summer. We are also encouraged to see results and research pointing to the return of business travel. Based on a recent survey, Global Business Travel Association (GBTA) stated: “A majority (88%) of suppliers and travel management companies (TMCs) report their bookings have increased in the prior month. This is much higher than the share who said the same in February (45%). On average, travel buyers say their company’s travel bookings are currently at 56% of the pre-pandemic level, up 22 points from February.” Moreover, Dr. Anthony Fauci, President Biden’s chief medical advisor declared that the U.S. was “out of the full-blown explosive pandemic phase,” which should reduce travel fears and drive further gains in business travel.