U.S. Market Recovery Monitor - 27 March 2021

Previous MRM versions: March 13 | March 20

Week Ending 27 March 2021

With Spring Break waning, it wasn’t surprising to see performance slow a bit in the week ending 27 March. Room demand, which was 350,000 less than the week of 20 March, was still above 21 million for a second straight week. Before the week of 20 March, that level had not been seen since before the pandemic. To put the demand change in perspective, on average, each U.S. hotel sold 10 less rooms this week than in the previous one. This week’s demand level was 83% of the level attained during the comparable week in 2019.

Weekly occupancy was 57.9%, down 1.1 points from last week. A closer look revealed that weekday demand, particularly on Wednesday and Thursday, held back industry performance. However, weekend occupancy (71.1%) remained strong and only slightly weaker than the previous week. Of note, Saturday’s level (73.4%) was the third highest daily occupancy of the past 15 months.

States losing demand slightly outnumbered those seeing week-to-week growth. The largest declines occurred with the leaders of the past two weeks: Florida and Texas. Of the states losing demand, Florida and Texas accounted for more than 57% of the loss. Among gainers, California led the pack, but those posting gains were insufficient to offset the losses of other states.

The highest weekly occupancy continued to be in Key West. Florida again comprised nine of the top 10 highest occupancy markets in the U.S. with most at 80% or more for the week. San Antonio, which had seen the best turnaround in the six weeks ending 20 March, saw the largest week-on-week demand decline of any market (-55,200 room nights) with occupancy falling by more than 16 points from the previous week. That slowing of demand in San Antonio is reflective of fewer teams in town as the NCAA Division I Women's Basketball Tournament progressed to later rounds.

While last week’s slowdown was widespread among hotels of all sizes and market types, the Top 25 saw less of an occupancy fall than all others combined.

ADR was virtually unchanged in the week with week-on-week rises among the Top 25 Markets and declines in all other markets combined. While absolute ADR remained unchanged, the index to 2019 increased to 82, its highest level of the past 29 weeks.

The market recovery monitor (MRM) continued to show the U.S. firmly in the recession category. This week’s index was the second highest of the pandemic-era, behind last week’s figure. On a hotel-level basis, we again saw the migration of a larger percentage of hotels into the Recovery category and less in the Depression group. More encouraging, the number of hotels in the Depression category is the smallest since the start of the pandemic.

While this week’s performance wasn’t as uplifting as the previous 7-day period, it’s important to remember that the recovery will produce weekly ups and downs as the industry and society head toward normalcy. STR’s forecasts continue to point to solid recovery in leisure demand, but with business demand, particularly groups and meetings, lagging sufficiently. Thus, expect weeks that normally cater to business to be weaker than those that skew leisure.

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.