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.
It seems that everything is positive for the aviation industry this week as more and more markets relax their Covid-19 restrictions and start to look forward to reopening their hotel doors. In many markets optimism is now flooding back, even Australia is beginning to plan for a reopening, New Zealand now increasingly looking isolated both geographically and in response to Covid-19. The United States finally announced a date for reopening access from major source markets although sadly with too short notice for some airlines that had already started cancelling services out to the middle of November.
When the COVID-19 pandemic upended the world’s travel activity in 2020, no transportation systems felt the effects more acutely than airports and airlines. Los Angeles International Airport (LAX), which ranked as the busiest origin-destination airport in the world prior to the pandemic, saw a staggering 96% drop in passengers in April 2020 as compared with the year prior.
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.
The last seven days have felt like things are beginning to get back to some degree of normality. Airlines are once again recruiting for cabin staff, new routes are being announced, more countries are being removed from restricted travel lists around the world and even I’ve escaped the UK! The IATA AGM last week was naturally cautious in tone and, given the industry losses in the last two years, why would anyone expect otherwise and of course, commitments were made on sustainability. So, all good news then…
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.
At the very start of the global pandemic airlines had to make rapid – and major – adjustments to their flight schedules as demand fell away and travel restrictions prevented flying. Throughout the past 18 months airlines have remained ‘light on their feet', continually adjusting their schedules to optimise networks and capacity to meet travel demand as and when it occurs. The notion of planning an airline schedule for the next 6 months still seems like a distant memory but schedule volatility is improving.
Migration and population trends for September 2021 are in. We are starting to see a slow return back to base, meaning residents returning to urban locations. But it is a slow process and by no means complete yet. Here are a few representative graphs that illustrate the point. Resident moves from May to September 2021 show a slight increase of residents in the Northeast (New York to Massachusetts), Southeast, Northwest and (less so) in the Southwest coasts.
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.
For ten of the past thirteen weeks, scheduled airline capacity from Russian airports has exceeded capacity in the same weeks in 2019. While there has been plenty of focus on the recovery of the domestic Chinese market and domestic US market, much less has been said about Russia but the country has witnessed a remarkable increase in flying this past summer. While international capacity from Russia has been steadily growing all year it still remains at 39% below 2019 levels, but domestic capacity has been positive since March, and seen a major surge between April and June.
During the peak summer months, Spain was one of the destinations in the world to see its domestic tourism sector get close to pre-pandemic levels with the most resilient destinations for both local and international tourists being the Balearic Islands and the Canary Islands. Tickets confirmed in September for any future travel versus the same period in 2019 show the Canary Islands as the most desired destination for locals and internationals yet again.
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.
Global airline capacity has increased week-on-week but remains stubbornly below the 80 million mark with an additional 180,000 seats taking the global total to 79 million (with a little bit of rounding up). A 0.2% increase in seats is at least a positive development compared to recent weeks, but capacity remains 30% below the 2019 level with little hope of an improvement in the coming weeks. The reopening of the United States, at a date sometime in November, may have resulted in a surge of airline bookings but it certainly hasn’t resulted in airlines adding capacity
US President Biden announced this week that the country will lift restrictions for vaccinated international travelers looking to come to the US. But if you lift restrictions, will travelers come? In today’s Insight Flash, we compare travel trends in the US and UK to see how spend from overseas might shift with more travel options open. Consumer Edge Data has been very prescient in the US, and caught July’s deceleration in spend well ahead of the companies lowering revenue guidance:
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.
As the team of data scientists and analysts at ForwardKeys keep a vigilant eye on travel recovery around the world, an unexpected twist keeps on appearing: the creation of quarantine travel hubs. We don’t wish to call it a trend, rather, it’s more of an example of the lengths people are willing to take to get to certain long-haul destinations – even with tricky travel restrictions in place. And it has continued to play a role in travel and tourism since the onslaught of the pandemic.
Finally, good news for every scheduled airline CEO in Europe and the United States; the US will allow double vaccinated travellers to enter from a date in early November. Quite why regulators can’t state the precise date always seems to be odd, but it appears to have been a catching trend through the pandemic. This announcement is great news and perhaps, fingers crossed, an indication that a recovery is underway in the industry - just China, South East Asia, Australia, New Zealand and Africa to go! So, just how much of a Christmas gift will the reopening of services be to those airlines operating?