After a difficult winter, Brazil’s hotel occupancy is once again on the rise, reaching 44% in August 2021, or about 74% of the 2019 comparable. While occupancy recovery has been slow, the country’s rebound in average daily rate (ADR) has been strong, with monthly rates even exceeding 2019 levels earlier this year. August ADR reached BRL295.05, which was just 3.4% below 2019, as shifts in demand and supply have helped drive impressive ADR performance.
Recent major sporting events in different corners of Australia produced differing performance impacts for the respective host markets. Perth realized its strongest revenue per available room (RevPAR) in five years during the AFL Grand Final, while performance during the NRL Grand Final in Brisbane was a bit more held back by COVID-19 restrictions. The AFL Grand Final was historic on two different fronts, with Melbourne FC ending a 57-year premiership drought and accommodation operators achieving their best night since early 2016.
When booking a hotel room, guests are considering more factors than ever in deciding which property to call home in their destination. One of the many considerations is price, and by extension hotel class, which leads us to this latest analysis of occupancy on the books in London. Examining future occupancy levels by class allows for a better understanding of the traveler booking rationale for the upcoming months.
U.S. hotel industry demand retreated in the latest week of reporting (26 September-2 October), failing to align with a rise in TSA security screenings. Normally, we expect an uptick in air passengers to yield an increase in hotel demand. This week was an exception with occupancy slipping 1.5 percentage points to 61.7%. Both weekday and weekend demand sank with 27% of the week’s demand loss occurring on Thursday. On a total-room-inventory (TRI) basis, which accounts for temporarily closed hotels, weekly occupancy was 59.4%. A little more than 48,000 rooms remain temporarily closed, mostly in New York City, Orlando, and San Francisco.
Recovery is on the minds of most everyone in the industry at this point in the pandemic. In a previous article published at the beginning of the year, STR analyzed South America and how the region’s hotel performance has been closely tied to its pandemic timeline. With the pandemic situation in mind as we enter the last quarter of the year, is it now time to talk about real recovery in South America? Let’s start with some global perspective.
Summer 2020 undoubtedly looked much different around Europe due to the global impact of the COVID-19 pandemic. Fast forward to this year, and there was hope that the region’s effort toward a more “normal” summer would be successful. On 1 July 2021, the EU Digital COVID Certificate Regulation entered into application, allowing fully vaccinated tourists to avoid tests or quarantines and broaden the list of European regions in which they could travel.
U.S. demand and occupancy continued to surprise and delight as both measures rose again during 19-25 September 2021, which was the second consecutive week of such gains. Most industry observers expected a moderate to sharp performance decrease in the weeks after Labor Day given the seasonal return to in-person schooling as well as the increase in COVID hospitalizations and a low volume of business travel. Occupancy for the week advanced to 63.2%, up 0.3 points week on week and 89% of the comparable level from 2019. During the summer, from the week of Memorial Day to the week of Labor Day, occupancy averaged 66.1% and 91% of 2019’s levels.
STR’s monthly 51-chart map focusing on revenue per available room (RevPAR) on a total-room-inventory basis shows a variety of recent national/regional market trends as well as the general pace of the industry’s continued recovery from the pandemic. With Labor Day marking the unofficial end of the summer leisure-oriented travel season, recent weeks have produced a dip from summer peaks in many markets with ground lost from 2019 RevPAR levels. This expected seasonal slowing in U.S. hotel business is evidenced in most states’ performance.
In an unexpected turn, U.S. demand and occupancy advanced in the latest week of reporting (12-18 September 2021) to the best levels of the past four weeks. Weekly demand increased 1.2 million rooms to 24.3 million, which was the largest weekly gain of the past nine weeks, pushing occupancy to 63.0%. Subdued demand was expected this week due to the mid-week observance of Yom Kippur. Daily occupancy advanced every day of the week, except Sunday, growing week on week and day on day, culminating in a level of 78% on Saturday.
With summer ending and the much-needed leisure travel surge waning, much of the industry’s attention and focus shifts to business travel. For true recovery to occur, the travel and hospitality industry needs to see business travel return to pre-pandemic levels. Unfortunately, the prospects for such a return do not appear good at the moment. The Delta variant continues to disrupt the reopening of economies in many parts of the world and, indeed, some countries are grappling with previously unseen levels of infections.
Occupancy fell by more than two percentage points to 61.0% for the week ending 28 August 2021. This was the fifth consecutive week with lower occupancy and the fourth straight week with an occupancy decline of more than two percentage points. More than 77% of all STR-defined markets in the U.S. reported lower weekly occupancy, and U.S. occupancy is now at its lowest level since mid-May as just 57% of hotels saw weekly occupancy above 60%—the lowest percentage in 14 weeks. Weekday and weekend occupancy have each been trending down for the past five weeks.
India’s progressive approach to vaccinations has led to an increase in travelers and hotel demand, especially in the leisure segment. Beyond the noticeable improvement, however, the country is showing a different trend in which markets are regaining occupancy. As noted in a recent press release, India’s recovery after the first COVID-19 wave was concentrated in leisure destinations such as Goa and Udaipur. But in this latest round of recovery, heavily populated markets and metro cities such as New Delhi and Mumbai have seen much improvement.
With surging COVID-19 infection rates and most schools now back in session, it’s not surprising that U.S. hotel occupancy continued to dip in the latest week of reporting (15-21 August 2021). Occupancy, down to 63.7% in the most recent seven-day period, has fallen by two percentage points or more in each of the past three weeks. On a total-room-inventory basis (TRI), which accounts for temporarily closed hotels, weekly occupancy was 61.3%. While increased COVID-19 cases are likely affecting demand, most of the loss appears to be seasonal due to the return of in-person schools.
With the help of summer vacation, Mainland China’s overall hotel occupancy rate showed a good upward trend in July, with the second and third week of the month reaching 2019 levels. Average daily rate (ADR) was even stronger, and when indexed to 2019, remained stable at roughly 110—meaning it was well above 2019 levels. As a result, Mainland China’s revenue per available room (RevPAR) index climbed from 87 at the beginning of the month to 117 by the end.
Regions around the world continue to see increased pandemic-related challenges, with the situation varying greatly by country. Fortunately, more than 4.6 billion doses of coronavirus vaccines have been administered in more than 190 countries, providing the tourism and hospitality industry a much-needed confidence boost, especially during the current summer months. However, with the increase in cases in many parts of the world resulting in new and extended restrictions, as well as the emergence of new virus variants, predicting future travel demand remains challenging.
The Asia Pacific region has seen increasing challenges through the first seven months of 2021, with situation varying greatly by country. While India has been steadily recovering from its latest outbreak, Australia and Indonesia are now facing new restrictions. Mainland China, which was already at 2019 performance levels, has seen new cases arising and performance dipping. Southeast Asia has been mostly quiet, but there is hope in the Phuket Sandbox program, which allows vaccinated foreign tourists to enter the island without the same level of restrictions as those unvaccinated.
Amid increased COVID cases, the rise of the Delta variant, and the return of in-person schooling, U.S. weekly hotel room demand dropped for a second consecutive week. The decrease in demand caused occupancy to fall to 68.0% for the week (1-7 August), the country’s lowest level of the past four weeks. The largest declines were seen in the south, where COVID-19 cases are surging and a high percentage of students have returned to the classroom. Louisiana and Florida saw the greatest occupancy declines, both falling more than 6 percentage points week over week.
All key markets in China showed June 2021 increases in hotel occupancy and average daily rate (ADR) compared to the same period last year, except for Guangzhou and Shenzhen. Guangzhou occupancy dropped to 27.6%, which was the market’s lowest level of the last 15 months. Thus, RevPAR dropped 50.5% year over year, which was 71.1% lower compared with June 2019. Because of the severe pandemic impact on performance data, STR is using 2019 as the industry’s recovery benchmark.
For a third consecutive week, occupancy remained above 70% (25-31 July 2021), but that was down from the pandemic-era high (71.4%) achieved in the previous week. While occupancy slipped, average daily rate (ADR) advanced to yet another record high (US$143) on a nominal basis. Nominal revenue per available room (RevPAR) stayed above US$100 for a second week, though it also fell from the previous week’s level. On a total-room-inventory basis (TRI), which accounts for temporarily closed hotels, weekly occupancy was 67.5% and nominal RevPAR was US$97.
The prospects for a swift tourism recovery have been dealt a blow in recent months as the Delta variant has spread rapidly across many parts of the world. While vaccination rates have continued growing in most developed countries, rising COVID-19 cases have forced some governments to reimpose restrictions or, at the very least, slow plans for reopening their economies. With summer holiday season now upon us, there are growing calls for proof of vaccination and continued uncertainties around travel guidance and requirements in many parts of the world.
