The coronavirus pandemic caused 2020 worst year for the US hotel market since the Great Depression, when occupancy rates fell below 40 percent. In 2020, the total occupancy was 41.6 percent.
However, the impact varied significantly according to the geographical location and type of hotel, according to and new message from CBRE Research.
New York City was the most affected market of all, with revenues per room available (RevPAR) down 77 percent year over year. In other cities, such as Boston, Chicago, San Francisco and Seattle, as well as Hawaii-dependent air traffic, RevPAR has declined by more than 70 percent.
The decline was due to a drastic drop in group demand, including business and congress tourism, as well as an 80% drop in incoming international travel to the US with ongoing travel restrictions.
“Demand cannot return to pre-Covid-19 levels without group demand returning,” the CBRE report said.
Meanwhile, secondary markets such as San Bernardino, CA and Jacksonville, FL saw more modest year-over-year declines, to about 26 percent and 38 percent, respectively.
“These less dense markets have benefited from their ability to better maintain social distance and from their attractiveness to the goal,” CBRE analysts wrote.
As for the scale of the hotel chain, the overall trend was for more expensive chains see a greater decline in room prices. But “luxury” real estate at the highest end of the market was somewhat less affected than “higher upscale”, according to CBRE.
The type of hotel also played a role, with congress hotels being unsurprisingly hit the hardest.
In terms of EBITDA, most hotels saw year-on-year declines of more than 100 percent – in other words, they lost money. However, there were two exceptions.
“Only resorts and hotels with extended stays generated revenues from operations in 2020, benefiting from their orientation to leisure time, the probability of longer stays and individual kitchen facilities,” the report states.
While hotel occupancy is now at an all-time low, occupancy rates just before the pandemic rose to an all-time high of more than 65 percent – a level not seen since the 1940s, as the following graph shows.