U.S. Market Recovery Monitor - 13 March 2021

About the MRM

When the U.S. hotel industry reached the one-year anniversary of the earliest COVID-19 impact, year-over-year percentage changes became less actionable when analyzing performance recovery. Thus, STR introduced a weekly Market Recovery Monitor that categorizes each STR-defined market based on an indexed comparison with the same time periods in 2019. An index is simply a ratio that divides current performance by the benchmark (2019 data).

For example, during the week ending 6 March 2021, U.S. RevPAR was $48.13. In the comparable week from 2019, RevPAR was $87.75. This produces an index of 54.8 ($48.13/$87.75*100), meaning RevPAR was slightly more than half of what it was in 2019.

We use an index to place each market in one of four categories: depression (index <50), recession (index between 50 and 79.9), recovery (index between 80 and 99.9), and peak (index >=100). Additionally, we highlight other top market performances that contribute to higher levels of recovery across the U.S.

Week Ending 13 March 2021

The U.S. achieved its highest absolute weekly RevPAR ($53.45) since the week ending 14 March 2020. A year-over-year decline of 15.8% was the smallest since the start of the pandemic. However, a lessening of the year-over-year decrease is mostly a function of an easier comparison. When indexed against 2019, RevPAR was 57% of the level achieved during the comparable week in 2019. Similar to the most recent weeks, that RevPAR index remains well in the recession classification.

On a market level, we continued to see a slight increase in the percentage of markets in the recovery category and a reduction among those considered in depression. Of 166 STR-defined markets, 101 saw positive movement in their 28-day RevPAR average when indexed to 2019. San Francisco continued to show the lowest index, whereas the Florida Keys posted the highest. On a hotel-level basis, larger urban hotels are the most likely to be in depression while those that are in small markets have a higher likelihood of reaching peak RevPAR (e.g., above 2019 levels).

More than 19.3 million room nights were sold during the week, the most of the past 52 weeks as demand rose by 1.2 million week over week. Forty-three states saw room demand rise in the week with one-third of the increase coming from two states: Florida and Texas. Florida saw the largest increase of any state, while Texas posted its fourth consecutive weekly gain. Florida also had the highest weekly occupancy of any state followed by Arizona, Texas, Alabama, and Mississippi. These five states all had occupancy above 60% for the week.

All Florida markets saw growth in occupancy led by the Florida Keys, which had the nation’s highest occupancy—as it has for the past eight weeks. Florida again claimed nine of the top 10 highest weekly occupancy markets in the country. Overall, nearly one-quarter of all U.S. markets reported occupancy above 60% for the week, with stronger weekend levels. Even with strong gains and improvements in four of the past five weeks., total U.S. weekly occupancy remained about 25% lower than it was in 2019.

Average daily rate (ADR) increased 4.2% week on week, the country’s largest weekly gain of the past four weeks. The gain was led by the non-Top 25 Markets. All but 23 of 166 markets reported weekly growth led by Daytona Beach and other spring break destinations in Florida and elsewhere. ADR, as indexed to 2019, rose to 76.4, meaning ADR is 76% of what it was during the comparable week in 2019. Twelve markets, including the Florida Keys, Gatlinburg/Pigeon Forge, and Daytona Beach reported an ADR that was above their comparable 2019 levels for the week.

With spring break in full swing and a lessening in COVID attitudes and restrictions, we anticipate absolute occupancy and ADR to rise over the next several weeks. Additionally, year-over-year comparisons will become significantly easier and eventually positive due to a match against the pandemic low period of 2021. Thus, recovery progress can best be judged using 2019 indices, which we will continue to monitor.

To view the Market Recovery Monitor for the week ending 6 March, click here.