Hotel occupancy hovers around 35% after Memorial Day boost

Occupancy rates hit a low of 21% in April

Hotel occupancy continued its recovery from the coronavirus, with rates reaching an average of 35% in the U.S. after Memorial Day weekend. (Getty)
Hotel occupancy continued its recovery from the coronavirus, with rates reaching an average of 35% in the U.S. after Memorial Day weekend. (Getty)

Hotels are slowly clawing their way back from pandemic purgatory.

National occupancy rates climbed to 35.4 percent between May 17 and 23, according to weekly data released by STR. That’s up from 32.4 percent the week prior, and it marks the sixth consecutive week that rates have improved.

Occupancy hit a low of roughly 21 percent in early April, and crossed the 30 percent threshold in the first week of May.

Jan Frietag, STR’s senior vice president of lodging insights, said it was “no surprise” that the highest levels of daily occupancy were recorded on Friday and Saturday, ahead of Memorial Day. All 50 states have begun re-opening at least some businesses and rolling back stay-at-home orders and other restrictions.

While hotel fundamentals are on the up, year-over-year figures show just how badly the industry has been battered by the coronavirus pandemic. Last week’s 35.4 percent occupancy rate marked a 50.2 percent plunge from a year ago. Average daily rate was down 39.7 percent and revenue per available room fell 69.9 percent year over year.

Fundamentals in many major markets are worse than the national averages, although four of the top 25 markets in the country — New York City, Tampa/St. Petersburg, Norfolk/Virginia Beach, and Phoenix — saw occupancy levels above 40 percent.

Sign Up for the undefined Newsletter

About 45 percent of hotel rooms in New York were occupied last week. RevPAR climbed about $2 to $54.47 and daily rate about 30 cents to $121.29.

Last week’s occupancy rate in the Los Angeles/Long Beach market climbed 2 percentage week over week to 37.8 percent. ADR and RevPAR also increased last week, hitting $105.88 and $40.04, respectively.

The state of California and local governments have rented rooms for vulnerable homeless locals throughout the pandemic as a way to safely house people and support a devastated hotel industry. More than 3,200 rooms have been rented in L.A. County alone, but logistical issues and personnel shortages have hampered the program.

Miami’s 29.3 percent occupancy rate was an improvement from 26.5 percent the week prior and the closest it’s been to 30 percent since the middle of April. ADR fell week over week to $80.50 from $81.15 a week earlier, but RevPAR climbed to $23.56 from $21.49 a week earlier.

Chicago went into the pandemic with a little over half of its rooms occupied and while last week was an improvement, the market is still performing poorly. Occupancy climbed 2 percentage points to 28.2 percent. ADR has been more or less flat at less than $72 all month. RevPAR improved last week to $20.19 from $19.17 a week earlier.

Oahu Island’s 12.7 percent occupancy rate was the lowest among major markets. But Orlando and Boston also had a bad week, with 22.5 percent and 22.8 percent occupancy rates, respectively.