Don’t Call It a Comeback: Top 25 Markets Kick-Start Hotel Recovery
Hotel Performance in Major US Metros Finally Showing Signs of Life
As some of the biggest and most business-based markets in the U.S., the top 25 markets have struggled the most of STR’s 166 markets over the past 14 months.
After a very long year and a half, hotels in the top 25 U.S. markets are finally reopening. New York City, San Francisco and Washington, D.C., all significantly reduced COVID-19 restrictions during May, and temporary closures compared to the previous month reflect that.
While none of the top 25 markets have completely reopened, less than five properties remain temporarily offline in eight markets, a sign of the major metros’ slow return to normalcy.
As restrictions continue to ease, many of the markets continuing to report high closure rates may find operational concerns a more pressing issue than demand. Labor force participation remains down across the U.S., creating a tight labor market and increasing competition for employees. Many hotels in the top 25 markets are struggling to properly staff properties, contributing to the lengthy closures.
In fact, demand has not proved to be a problem at all even as more hotels come back online. As of May 2021, 20 of the top 25 markets are once again reporting occupancy above the 50% mark, led primarily by beach and leisure-driven markets.
In a refreshing change of pace, Los Angeles and San Diego are once again among the leading top 25 markets, in large part due to California’s reduced restrictions. With vaccination rates continuing to climb, the school year ending, and business travel slowly starting to resume, the biggest U.S. markets should remain optimistic about summer performance.
Interested in more? STR’s Hotel Data Conference is back, live and live-streamed this August, with an agenda of more than 50 data presentations and panels to explore hotel performance in a post-COVID-19 world.
Kelsey Fenerty is a research analyst at STR.
This article represents an interpretation of data collected by STR, CoStar's hospitality analytics firm. Please feel free to comment or contact an editor with any questions or concerns.
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.