HOUSTON – (Realty News Report) – The hotel industry has been hit hard by Covid-19.
For the week ending April 18, the Houston hotel occupancy rate was 23.9 percent, compared to 63.8 percent a year earlier, according to the STR hotel research term.
STR said Houston’s average daily room rate was down 42.6 percent to $59.31. RevPAR (revenue per available room) was $14.15, down 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,” says 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 putting together a possible hotel deal in downtown Austin, which had been the strongest market in the state.
But, like the rest of Texas, the Austin hotel market has fallen on hard times. A number of major hotels in downtown Austin have been closed, including the JW Marriott, the Fairmont and the Driskell. RevPAR in downtown Austin dropped to a low of $3.62 in early April. At time last year, downtown Austin reported revenue averages over $260.
On a national basis, hotel occupancy stood at 26 percent, STR said in its most recent report. That was a 82 percent drop from a year ago.
“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 VP of lodging insights. “The 1.4 million additional room nights sold the last two weeks only represent around 100,000 new rooms occupied per night, but gains even that small are certainly better than further declines.”
Urban and resort hotels are the worst hotel segments, with occupancy rates below 20 percent.
“Hotels are experiencing a significant contraction to demand. Our current expectations are that as early as Q3 2020, activity will begin to stabilize, and a recovery is expected to be underway by Q4,” said CBRE Hotels.
May 4, 2020 Realty News Report Copyright 2020
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