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U.S. Market Recovery Monitor - 17 April 2021

Previous MRM versions: 3 April | 10 April

Week ending 17 April

As expected, due to the end of the spring break leisure season, U.S. industry recovery came to a pause during the week ending 17 April as demand fell 4% week over week. The good news, room demand remained above 21 million for a fifth consecutive week. Occupancy for the week was 57.3% using STR’s standard methodology and 54.4% on a total-room-inventory (TRI) basis—the latter accounts for temporarily closed hotels.

Weekly occupancy slowed as the spring break period ended

Most states saw weekly room demand fall, especially Florida, which saw its largest week-to-week decrease since early January, resulting in an 8-point loss in occupancy for the week. Even with the decrease, Florida’s room demand remained above two million for the week, which ranked second behind Texas. While the Lone Star state also saw a drop in demand, it’s decrease was negligible with occupancy nearly flat compared with the previous week. California was the only other state to have room demand above two million for the week, but unlike Texas, the Golden State reported a more significant drop in demand with occupancy decreasing by 5 points week over week. While Florida saw the largest week-over-week decline in room demand, South Carolina, another spring break favorite, saw its weekly occupancy fall 12 points from the previous week, the largest of any state.

The slowdown in this week’s room demand was centered in the weekdays, especially on Wednesday and Thursday, when occupancy fell by more than four points each day. Weekends remained solid with occupancy at 70% (66.4% TRI). Weekend occupancy has been above 70% (66% TRI) in four of the past five weekends. Even in markets that saw a sharp decrease in full week occupancy, weekend occupancy held up. Overall, 44% of markets reported TRI occupancy above 70% during the week versus 49% one week prior.

While demand was on the decline, hotels continued to make recovery progress as more than half of all hotels continued to report occupancy above 60% for a fifth straight week. While there was an uptick in those with occupancy below 30%, the increase was very slight. In the week ending 10 April, 2,964 participating hotels reported occupancy below 30%. During the most recent week, 3,105 hotels saw their occupancy dip below that threshold. Of those with occupancy below 30% this week, more than half have been in that category for the past five weeks.

After two weeks at US$112, ADR dropped to US$107 with large declines seen in leisure destinations like Daytona Beach, Myrtle Beach, etc. But like occupancy, weekend ADR held up, falling only 1.2% week over week to US$121. Weekend ADR has been above US$121 for the past four weeks. 

While absolute RevPAR slipped below US$60 on a TRI basis, the index to 2019 increased due to a comparison with Easter week in 2019. Thus, while this week’s chart shows more hotels in the Peak and Recovery zones, week-over-week data revealed that only 60 markets saw a gain in weekly RevPAR. A week ago, 126 had reported growth.

RevPAR down WOW, but index up due to 2019 Easter comp
2019 Easter comp pushes more markets into recovery status

Outside the U.S., industry performance saw little change during the week. Only nine countries saw TRI weekly occupancy above 50%, including Singapore, Australia and China. On a market level, slightly more were in the Depression category this week compared to the previous week.

Slightly more non-U.S. markets fell into Depression category

We expect that over the next six to seven weeks, industry performance will vary considerably given limited business and group demand. The summer travel season is still anticipated to be strong, assuming a continued positive trends in willingness to travel.

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.