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“We are not close to the bottom”: U.S. hotels suffer declining revenues, mass layoffs

Nationwide, the coronavirus has cut deeply into occupancy and room rates

Hotel occupancies fell 25% to 50% in major markets hit hard by the coronavirus. (Credit: iStock)
Hotel occupancy fell 25% to 50% in major markets hit by the coronavirus. (Credit: iStock)

By every conventional measure, the hotel industry took a beating last week as the country went further into lockdown to contain the spread of the coronavirus.

Occupancy, average daily room rates and revenue per available room fell drastically last week, according to new figures from the hospitality research firm STR.

“Through comparative analysis of the occupancy trends in China and Italy over the past weeks, we can with certainty say that we are not yet close to the bottom in the U.S.,” STR senior vice president Jan Freitag said.

In New York City, occupancy was nearly halved from the week earlier to a rate of about 49 percent, according to STR. Some hotel owners have said occupancy in their properties is as low as 15 percent.

Revenue per available room in New York fell by nearly 55 percent to just about $88 per room.

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Several hotels in New York are closing down as reservations have disappeared. The 1,878-room Hilton hotel in Midtown, one of the largest in the city, is closing later this week.

The New York Hotel Trades Council said roughly half of its 40,000 members have been laid off.

“This is a very dark moment not just for the hotel industry,” the union’s president, Peter Ward, told the New York Times. “It’s a dark moment for the retail industry, for the restaurant and bar business, for Broadway.”

In Los Angeles, STR figures show occupancy dropped more than a third to a rate of about 58 percent and revenue per available room dropped about 40 percent to nearly $93 per room.
Miami saw a one-quarter decline in occupancy to almost 66 percent and a 33 percent drop in revenue per available room to nearly $145 per room.
And Chicago saw occupancy drop more than a third to almost 44 percent, while revenue per available room fell 43 percent to nearly $48 per available room.
Executives from the country’s largest hotel companies went to Washington, D.C., on Tuesday seeking a $150 billion bailout package.

Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229

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Coronavirus Real EstateHotels