U.S. Market Recovery Monitor - 6 March 2021

About the MRM
As the U.S. hotel industry hits the one-year anniversary of the earliest COVID-19 impact, year-over-year percentage changes become less actionable when analyzing performance recovery. Thus, STR has introduced a weekly Market Recovery Monitor that will categorize 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 current RevPAR is slightly more than half of what it was in 2019.

We will 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 will highlight other top market performances that contribute to higher levels of recovery across the U.S.

28 February-6 March

U.S. RevPAR remained in recession territory while year-over-year results reflected the smallest decreases since the beginning of the year. Again, year-over-year changes won’t tell the full story right now with easier, pandemic-affected comparisons on the calendar. On a 28-day moving average basis, roughly a quarter of all markets remain in depression; however, we have seen a slight lessening in the number of markets in that category over the past several weeks. Markets deep in the depression stage include San Francisco/San Mateo, CA; New Orleans, LA; and Oahu Island, HI. RevPAR in these three markets is 30% or less of what it was in 2019, and each has been at that level for some time. While all hotel types have been impacted within those three markets, large, convention hotels (300+ rooms) account for most of the RevPAR loss.

On the flip side, five markets are in recovery, led by Louisiana South, which has exceeded its 2019 RevPAR since September. A deeper look revealed that the Louisiana South Area submarket was the main driver of performance with Baton Rouge and Lafayette in the recovery stage.

Other notable findings for the week included an improvement in U.S. occupancy to a 20-week high of 49.0%. That level was led by small and medium hotels (under 300 rooms) with most markets reporting week-on-week growth. Room demand, the number of rooms sold, topped 18 million for the first time since October. Occupancy was up across nearly all states, led by Georgia, which saw week-on-week occupancy increase by 5.7 points. Florida again had the highest occupancy of any state in the week even though it fell slightly compared to the previous week. Nearly all Florida markets saw week-on-week occupancy fall except for a handful, which were mostly beach markets. Despite the weaker performance, nine of the 10 highest weekly occupancy markets continued to be in Florida.

For the third consecutive week, Texas saw occupancy achieve a pandemic high (59.4%) with all markets, except San Antonio, seeing week-over-week gains. Weekend occupancy in Texas surpassed 71% for the first time in a year with weekend occupancy in Fort Worth/Arlington above 82%. Weekday occupancy also improved but remained in the mid-50s.

While occupancy was on the increase, U.S. ADR remained somewhat stagnant, up 1.4% week over week. While most markets saw small week-over-week ADR gains, nearly a quarter saw weekly growth of 3% or more led by Daytona Beach, which is hosting the 80th Annual Daytona Beach Bike Week, estimated to draw 300,000 individuals from March 5-14. We expect that event, plus Spring Break, to boost Florida occupancy in the coming weeks.