COVID-19: Insights on Hotel Recovery, United States #40

June 3, 2020

With our access to real-time traveler audiences and unmatched visibility into global travel demand, we’re in a unique position to share the current travel trends at the forefront of marketers’ minds. In this blog series, we take a look at the data to aid travel marketers in determining their strategy during the COVID-19 crisis. They can use these trends to inform their marketing strategies during this period and be prepared for the recovery once the situation stabilizes. 

These insights are based on data collected on Monday, June 1, 2020. We review our data frequently to provide regular insights into consumer behavior trends and patterns. Sojern’s insights are based on over 350 million traveler profiles and billions of travel intent signals, however it does not capture one hundred percent of the travel market.

US Hotel Recovery 

The US is in the midst of the seventh straight week of improvement, showing continued growth for domestic hotel searches and bookings. Our data reveals that since the lowest point, the first week in April, growth has been slow, but steady. COVID-19 brought occupancy rates down to unprecedented lows across the industry. STR reported a 21% occupancy rate of hotel rooms in the US for the week of April 5, although rates per destination varied. Since then, there has been steady improvement across the nation as a whole, though some states are recovering faster than others.

Because the recovery stages are not universal, we’ll likely see different segments and markets recover at various rates. Drive markets are poised to recover faster, as industry experts say 2020 is the “year of the road trip”, with 60% of Americans still intending to take a vacation in 2020 and stay in a hotel within six months of the COVID-19 curve flattening. 

Many hotel operators agree that business travel will be slower to recover, particularly because businesses are being very mindful of how they’re spending in the economic downturn, as well as respecting the health and safety of employees. David Kong, Best Western’s CEO, said that as long as there is no vaccine, his confidence in business travel is low. However, if we look to China to understand recovery, we can assume that eventually business travel will come back. Marriott has officially opened all hotels in China and CEO, Arne Sorenson, said that Chinese business travelers are flying again. 

Marriott is also seeing a steady recovery in the US. Marriott hotels that remained open crossed the 20% occupancy threshold and continue to see an improvement. Margarita Holdings CEO reported that all of the company’s properties were at 100% capacity over Memorial weekend and bookings going forward looked strong as well, especially in July. 

Taking a look at Sojern data, the graph below, indexed to the lowest point of the COVID-19 crisis (week of April 5), shows that searches are up 24 points and bookings are up 48 points. 

YoY Change in Hotel Searches and Bookings Indexed to April 5, 2020

While the graph above gives us visibility into recovery, we also pulled data to understand growth since the last “normal” week pre-COVID-19 effects. We indexed back to the week of March 8, 2020 and we’re seeing searches down 33 points and bookings down 59 points overall. As evident on both graphs, the hotel industry is seeing growth in searches and bookings since the low point.

YoY Change in Hotel Searches and Bookings Indexed to March 8, 2020

As noted, US states are in different stages of recovery in terms of hotel searches and bookings. The top 10 states that are seeing the biggest improvement for hotel bookings since the low point are Mississippi, Atlanta, Tennessee, South Carolina, Arizona, North Carolina, Florida, West Virginia, Utah, and Georgia (listed in order). These states had little restrictions or were among the first to lift restrictions and have strong drive markets. Some of these states also have a strong vacation rental presence and fall on the list of best climates in the US, making them the perfect destinations to enjoy an outdoor getaway as restrictions began to lift in the spring season. 

Top 10 Most Improved States for Hotel Bookings Indexed to April 5, 2020

The Future of Hotel 

Though the hotel industry has been deeply impacted by COVID-19, the US is expected to see a speedy turnaround in demand in 2021 and 2022. CBRE foresees the demand to increase to pre-COVID-19 levels by the third quarter of 2022. Due to low occupancy rates, closed properties, and price drops, we may not see a pre-COVID national Average Daily Rate (ADR) until the third quarter of 2023. Even then, less than half of the markets will achieve ADR recovery. 

Sojern will continue to share more US insights as we monitor the situation and find interesting trends, to help travel marketers shape their strategies when the industry starts to recover from this outbreak. 

For the rest of the COVID-19 insights series and webinars click here.

About Christy Jobman

Christy is Sojern's Marketing Manager, US, Canada, & LATAM. She loves all things communications and she's so happy to be using the Communications/Journalism degree she earned at the University of Nebraska at Omaha. When she's not building relationships and cross collaborating to build out collateral for the sales teams and account managers at Sojern, she's coaching at her gym, dabbling in the non-profits world, exploring, and cooking new dishes.

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