More U.S. Hotel Closures Likely with Occupancy Rates Near 20%

hotel ext-NYCAndrew Lichtenstein/Corbis via Getty Images
More hotels are likely to close as occupancies fall below 20 percent in most of the country’s largest markets.

(Bloomberg)—Occupancy rates

at U.S. hotels fell slightly to 22% in the week ending April 4, as social-distancing measures continued to batter travel companies.

The key industry metric fell below 20% in a majority of the 25 largest markets, according to lodging data firm STR.

With so few hotel guests, more properties are likely to close, according to a research note from SunTrust Robinson Humphrey.

“We assume the next shoe to drop will be further hotel closures where running sub 20% occupancy is unsustainable,” the note said.

Luxury hotels are taking a particularly hard hit as the pandemic shuts down travel. The occupancy rate at those properties was 5.5%, according to STR.

In New York, where owners have offered free or discounted rooms to doctors and nurses, occupancy rates increased to 18%.

To contact the reporter on this story: Patrick Clark in New York at [email protected].

To contact the editor responsible for this story: Craig Giammona at [email protected]

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