Hospitality Sector Begins a Long Road to Recovery
Average occupancy levels collapsed from 64.1 percent in the last week of February to 22.6 percent in the last week of March—an unprecedented disruption to the business. The wave of hospitality sector job losses, both layoffs and furloughs, totaled 8.2 million positions between January and April, nearly half of hospitality jobs in the U.S. No other employment sector was struck harder. As the economic shutdown cautiously comes to an end and people begin to step outside their homes, green shoots are beginning to emerge for some hotels.
Extended stay hotels, featuring kitchens and larger rooms, have delivered some of the strongest results, particularly those near major medical facilities. Many healthcare workers at hospitals who are regularly exposed to COVID-19 have opted to stay at hotels rather than put their families at risk of exposure. Economy hotels, particularly those along the highway system, continue to be patronized by shipping and transportation workers, while hotels in small towns have also seen less occupancy attrition. Drivable vacation destinations near opened beaches, lakes and hiking destinations have also seen a substantive uptick in occupancies as people escape their months-long isolation and get away for a few days. Combined, these trends have pulled the national occupancy rate back to 36.6 percent as of the last week of May.