COVID-19 Effects Intensify by Quarter’s End

  • The COVID-19 pandemic has forced some states to impose strict stay-at-home orders that are adversely affecting many industries. This is leading the U.S. economy into a recession that will result in very sharp declines in GDP for H1 2020 and in job losses, particularly in the retail, food & beverage and transportation sectors.
  • The hotel industry is particularly exposed to effects of the pandemic. Severe reductions in demand and occupancy characterized performance in March and are expected to continue through Q3.
  • Hotel demand was down 14.2% nationally in Q1 2020 and 41.2% in March. Supply growth remained at 2.0% in Q1.
  • National occupancy decreased 15.9% year-over-year to 51.8% in Q1. Occupancy in March decreased to 39.4%.
  • ADR fell by 4.0% year-over-year in Q1. RevPAR fell by 19.3% year-over-year, the biggest drop since the height of the Great Recession in Q2 2009.
  • Luxury and upper upscale hotels had the most dramatic decrease in occupancy, while economy and midscale hotels had the least severe drops in occupancy.
  • Hotel closures increased rapidly across all chain scales in March. Independent hotels had the most closures.
  • Oahu had the smallest drop in RevPAR (-10.3%). Ft. Lauderdale (-11.4%) and Miami (-11.7%) also had relatively small RevPAR losses. No markets had RevPAR growth in Q1.
  • San Jose-Santa Cruz had the largest drop in RevPAR (-30.8%), followed by San Francisco (-29.9%) and Austin (-29.4%). The majority of the revenue losses occurred in March.