11/12/2021
The first full week of hotel data since the Omicron variant was detected doesn’t show signs the new strain torpedoed performance.
Revenue per available room, the hotel industry’s key performance metric, in the U.S. last week was roughly 9 percent off 2019 levels, according to STR data. It was down 14 percent in Europe and showed a 36 percent decline in China.
None of these figures are stark changes from performance over the last month, and massive impact may never arrive considering swelling sentiment Omicron cases, though more contagious, are milder than the earlier Delta variant.
I think A, it’s too early to tell, but B, I am not sure we’re going to see anything because I think the people who want to take travel risks have already taken that travel risk and will continue to do so,” said Jan Freitag, national director of hospitality analytics at CoStar.
While analysts noted there was likely to be some industry performance reaction in Europe and China due to government policy and travel restrictions, U.S. hotels most likely — barring any unexpected development — would generally stay the course in their pandemic recovery.
U.S. hotels did show a significant week-to-week swing in performance, as the prior week — which included the Thanksgiving holiday — was nearly 20 percent over 2019 levels. But the decline last week was chalked up more to seasonality than variant fears. December and January are historically some of the slowest months for hotel business.
That said, there were some winners of the week: More affordable segments of U.S. hotel industry continued to post higher numbers than 2019 last week while more expensive hotels, often those catering to business travelers, sank in performance.
“Early December is low season for overall travel and as such we are not surprised to see greater gaps between the performance of leisure travel-heavy Economy/Midscale and corporate travel-heavy full-service,” reported Truist Securities in a weekly memo on U.S. hotel.
