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STR: U.S. hotel demand falls as COVID-19 cases rise

As June turned into July, hotel demand in the U.S. dipped for the first time in 11 weeks, according to the latest stats from STR. Since mid-April, occupancy had risen in week-to-week comparisons for nearly months.

During the week of June 28 to July 4, occupancy reached 45.6 percent, down 30.2 percent year over year. Average daily rate, meanwhile, reached $101.36, down 20.9 percent from the same week in 2019, and revenue per available room reached $46.21, down 44.8 percent.

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“Demand came in 67,000 rooms lower than the previous week, and beyond that, July 1 was a reopening day for a lot of hotels, further impacting the occupancy equation,” said Jan Freitag, STR’s SVP of lodging insights. “A rise in COVID-19 cases has led to states pausing or even rolling back some of their reopenings. Beaches have been a big demand driver for hotels, but with many beaches closed ahead of the July 4 holiday, all but two markets in Florida showed lower occupancy than the previous week. Growing concern around this latest spike in the pandemic has further implications for leisure and business demand alike.”

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Top Markets

Aggregate data for STR’s top 25 markets showed lower occupancy (39.6 percent) and ADR (US$100.07) than the national average. Norfolk/Virginia Beach, Va., was the only one of those major markets to reach a 60 percent occupancy level, and even surpassed it to reach 63.4 percent.

Three additional markets surpassed 50 percent occupancy: Detroit (52.8 percent); Tampa/St. Petersburg, Fla. (51 percent); and San Diego (50.3 percent).

Markets with the lowest occupancy levels for the week included Oahu Island, Hawaii (19.4 percent); Boston (28.7 percent); and Orlando (29.3 percent).

Occupancy in New York City hotels was 40.1 percent, down from 42.4 percent the previous week. In Seattle, occupancy was 32.5 percent, a slight decline from 33.2 percent the previous week.

Of note, 11 of 13 Florida markets saw week-over-week occupancy declines.

Also of note, economy hotels remained the strongest among the classes, reaching an occupancy level of 54.6 percent. Cape Cod, Mass., saw the largest weekday vs. weekend point gain in occupancy at 50.9.

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