U.S. Market Recovery Monitor - 20 March 2021

Previous MRM versions: March 6 | March 13

Week Ending 20 March 2021

Pent-up demand has clearly revealed itself over the past two weeks. Over the 14-day period ending with 20 March, U.S. hotel demand reached 21.8 million room nights, which was an increase of 3.7 million from the previous two weeks and the highest for any two-week window since late February/early March of 2020. As a result, occupancy hit yet another pandemic high of 58.9%. Even when switching to STR’s total-room-inventory (TRI) methodology, which factors in those properties temporarily closed due to the pandemic, occupancy still came in at 55.7%. Occupancy, regardless of methodology, has been on a steady rise since late January. 

Weekend occupancy was even stronger at 71.7% (67.6% including temporary closures)—both percentages were the highest in the country since March 2020. Eight states saw weekend occupancy soar past 80% with another 10 above 70%. Weekday occupancy was also the best of the past year, surpassing 50%, and up 6.4 points versus the previous week.

Every state saw demand grow in the week with the largest gains coming from Florida, Texas, California, Tennessee, Colorado, and Nevada. These six states accounted for nearly half of the total U.S. demand gains in the week. Additionally, Florida, Texas, and California saw weekly room demand surpass two million rooms nights with Texas selling more rooms last week than in the same week in 2019. In fact, Texas sold more rooms last week than it had during any other week since late July in 2019. For the U.S. overall, demand for the week was 81% of what it was in 2019.

All but three U.S. markets showed week-to-week demand growth, led yet again by the Florida Keys, where occupancy topped 95%. And, like last week, all but one of the top 10 highest weekly occupancy markets were in Florida. While not in the top 10 of the highest occupancy markets this week (number 12), San Antonio has seen the largest turnaround of any market in the past six weeks: from 38.1% total-room-inventory occupancy in the week ending 6 February to 78.1% last week. The upturn began with displaced residents from the freak winter storm that paralyzed most of Texas and continued last week with the 2021 NCAA Division I Women’s Basketball Championship in town. The tournament runs through 4 April.

U.S. ADR also reached a pandemic high, up 5.2% week-over-week, following the previous week’s 4% gain. Fifty-six markets reported a weekly ADR that was 95% or more of their 2019 ADR for the same week. On a year-over-year basis, ADR increased 15.8%.

RevPAR was up 124.5% this week via easy comparisons to last year. We expect RevPAR growth to remain in the strong double-digits for some time to come. Thus, it is better to judge the strength of the recovery via indexing to the same week in 2019. As compared with 2019, weekly RevPAR indexed at 69, meaning that absolute RevPAR is 69% of what it was in 2019. Including temp closures, the index was at 65.

With strengthening demand, the U.S. market recovery monitor showed continued improvement, particularly in the number of markets in the Recovery category. It is also encouraging to see less markets in the Depression group. The markets with the lowest indices continued to be those that have a higher number of large hotels (300+) and are mostly Urban, including San Francisco, New York, and New Orleans. In total, there are still seven markets with a weekly RevPAR that was less than 30% of what it was in 2019.

Finally, looking at the industry outside of the U.S., we found that most markets are categorized in the Depression category given that harsh travel restrictions remain in place. We expect recovery outside the U.S. to begin in earnest later in the year.

About the MRM

When the U.S. hotel industry reached the one-year anniversary of the earliest COVID-19 impact, year-over-year percentage changes became less actionable when analyzing performance recovery. Thus, STR introduced a weekly Market Recovery Monitor that categorizes each STR-defined market based on an indexed comparison with the same time periods in 2019. An index is simply a ratio that divides current performance by the benchmark (2019 data).

For example, during the week ending 6 March 2021, U.S. RevPAR was $48.13. In the comparable week from 2019, RevPAR was $87.75. This produces an index of 54.8 ($48.13/$87.75*100), meaning RevPAR was slightly more than half of what it was in 2019.

We use an index to place each market in one of four categories: depression (index <50), recession (index between 50 and 79.9), recovery (index between 80 and 99.9), and peak (index >=100). Additionally, we highlight other top market performances that contribute to higher levels of recovery across the U.S.