Hotel Performance Up from Rock Bottom
Hotel revenue is down 64.8 per cent compared to last year, but weekly occupancy has made significant gains since the low point of Covid-19.
A study of 27 global tourist destinations including Sydney and the Gold Coast found weekly hotel revenue per room bottomed out at 17.5 per cent for the week ending 28 March, according to joint analysis by STR and AirDNA.
They measured the impact of Covid-19 on hotels and hotel-comparable short-term rentals between January 2019 and 27 June, 2020.
Short-term rentals performed better than hotels; down 4.5 per cent in profit compared to last year with a low of 34.3 per cent.
“Hotels were hit harder due to greater reliance on group demand and business travel,” authors Will Sanford and Dillon DuBois said.
Sydney hotel occupancy dropped -77 per cent to during the Covid low and comparable rentals dropped -35 per cent.
On the Gold Coast, hotels dropped -89 per cent and comparable rentals -29 per cent.
Covid-19 global hotel occupancy changes
| Rank | Worst Hit | Most Improved |
|---|---|---|
| 1 | Rome -97% | Smoky Mt,TN 1294% |
| 2 | Barcelona -94% | Gulf Shore, AL1139% |
| 3 | Berlin -93% | Atlantic City 695% |
| 4 | Smoky Mt, TN -93% | Rome 543% |
| 5 | New Orleans -93% | Myrtle Beach, SC 459% |
| 6 | Honolulu 92% | Destin, FL 391% |
| 7 | GolfShore, AL -89% | Barcelona 332% |
| 8 | Gold Coast -89% | Daytona Beach, FL 331% |
| 9 | Dublin -87% | Gold Coast 298% |
| 10 | Frankfurt -87% | Berlin 267% |
^ Source: STR, AirDNA of 27 cities
Hotel sector already showing signs of recovery
Largely as a result of the massive drop in hotel occupancy during Covid-19, rates have increased 124 per cent, according to the research.
Gold Coast hotel occupancy has increased 298 per cent and Sydney 67 per cent since bottoming out, and comparable rentals improved 27 and 21 per cent respectively.
Sanford and DuBois said it was too soon to call it a rebound, as it was unclear if week-to-week increases were sustainable, particularly with the threat of future outbreaks.
“Still, as we monitor the progress, the changes in travel behaviour in a Covid-19 world offer interesting insights into how quickly the accommodations sector can adapt and recover.
“As the world began to grapple with the virus, social distancing and other restrictions took its toll on business and group travel, which had a disproportionate impact on hotels,” Sanford and DuBois said.
“Meanwhile, many of the short-term rental sector’s unique sell propositions became strengths post-outbreak.
“Whenever the pandemic subsides or a vaccine becomes widely available, we expect urban markets to slowly return to normal.”
