Coronavirus claims a major NYC hotel as occupancy rates rise slowly

The hotel industry in the U.S. is in the midst of a slow, but steady recovery as the coronavirus pandemic continues to ravage the nations of the world. The slow tick upward for hotels comes from data released by STR -- a firm that compiles market data, analytics and benchmarking for the global hospitality industry -- for last week, May 10–16, 2020.

For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.

In April, the industry saw "unprecedented lows" in terms of occupancy rates, with just 21% of hotel rooms occupied across the U.S. during the week of April 5–11, 2020, with variation depending on the specific destination. In the weeks since then, the industry has seen steady improvement, though it's been anything but robust.

During the week that ended May 16, hotels across the U.S. reported occupancy levels of 32.4%, which is down about 54% compared to the same week last year but up from "rock bottom" in April. And, ever since hotels hit their lowest occupancy rates in early April, each week has seen an increase in occupancy across the nation as a whole. Each increase has been small, to be sure, but it's been steadily trending upward nevertheless.

According to Jan Freitag, STR's senior VP of lodging insights, "Last week's data showed demand of more than 10 million room nights sold for the first time since the end of March, and this past week, the industry inched close to 11 million."

Freitag added that with all 50 states in the U.S. relaxing at least some coronavirus-related restrictions, this type of slow but steady growth should continue as demand for leisure-oriented vacations continues to increase in "drive-to destinations with beach access like Florida, or national park access, such as Gatlinburg, Tennessee."

Related: What to know as national parks reopen

While some areas, like Seattle, have seen meaningful increases in their hotel occupancy rates, others, particularly those that are still under heavy restrictions, have hardly seen any rebound. For example, Honolulu, Hawaii, hotels are reporting occupancy rates of just 11.7% compared to last year, up ever-so-slightly from the 10.5% that was reported for the week of March 22–28. While it has trended upward in Honolulu, it's still a staggeringly low number for a market that typically sees millions of tourists each year.

Related: Hawaii extends 14-day quarantine through June -- Here's what tourists need to know

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

While the hotel industry is showing encouraging signs of life, "less bad" news isn't "good" news by any means. In fact, we're beginning to see concrete examples of how the coronavirus has wreaked havoc on cities like New York, where occupancy rates remained essentially flat versus last week (43.6% vs. 43.7% for last week).

The Times Square Edition, a hotel that's barely a year old, has become one of the first properties to succumb to the virus, as it's planning to cease operations permanently come August. Per a Marriott spokesperson, the chain "has provided advance notice to employees, government officials and union officials that according to current information, it expects to cease operations of the Times Square EDITION Hotel in New York City on or about August 13, 2020."

So, as the United States and other countries around the world tiptoe into relaxing coronavirus lockdown restrictions, is now the time to book your trip?

Just about every major hotel chain has released detailed plans for new measures that they're putting into place to promise guests and employees clean and safe hotels. And, chains have also loosened cancellation and rebooking policies to provide greater flexibility to travelers. Right now may not be the right time to travel for everyone, but there's no harm in making plans for later this year or early next year if you're able to take advantage of more favorable hotel chance and cancel policies.

Bottom line

It's safe to say that the travel industry has begun the long journey to recovery.

For each of the last several weeks, hotels across the nation have seen their occupancy rates rise -- even if just slightly. Airline passenger screening in the U.S. has seen a similar increase. As we head into the summer, and a further loosening of restrictions, it's likely that we'll see these trends continue, even though it'll also likely be quite a long time before we see the kinds of numbers that even come close to what they were in 2019.