HOUSTON – (Realty News Report) – The hotel industry has been devastated by the COVID-19 pandemic.
For the week ending April 18, Houston’s hotel occupancy rate fell to 23.9 percent, compared with 63.8 percent during the same week a year earlier, according to STR, a leading hotel research firm.
STR reported Houston’s average daily room rate dropped 42.6 percent to $59.31. Revenue per available room (RevPAR) sank to $14.15, a decline of 79.2 percent from a year ago.
“Almost all hotels are in full damage control with most staff furloughed or laid off and only a skeleton crew hanging on,” said Bill Franks, a Houston hotel developer. “Some hotels are closed and the road ahead is rough. There will be many hotel casualties and many hotel employees who will suffer.”
Earlier this year, before the COVID-19 crisis, Franks was involved in assembling a potential hotel deal in downtown Austin, which had been the state’s strongest market.
Like much of Texas, Austin’s hotel market has since collapsed. Several major downtown properties, including the JW Marriott, the Fairmont and the Driskill, temporarily closed. RevPAR in downtown Austin hit a low of $3.62 in early April, compared with revenue averages of more than $260 at the same time last year.
Nationally, hotel occupancy stood at 26 percent in STR’s most recent report, an 82 percent drop from the prior year.
“Demand has grown slightly across the country during the last two weeks, which could provide some hope that the levels seen in early April were indeed the bottom — especially with some states now moving to ease social distancing guidance,” said Jan Freitag, STR’s senior vice president of lodging insights. “The 1.4 million additional room nights sold over the last two weeks represent roughly 100,000 more rooms occupied per night. Even gains that small are better than further declines.”
Urban and resort hotels remain the hardest hit segments, recording occupancy rates below 20 percent.
“Hotels are experiencing a significant contraction in demand. Our current expectations are that activity may begin to stabilize as early as Q3 2020, with a recovery underway by Q4,” said CBRE Hotels.
May 4, 2020 Realty News Report Copyright 2020
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