Hotel rooms in urban markets have lower rates and lower incomes

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Can’t find a cheap beach hotel this summer? Your next best bet might be to stay in an urban market.

Twenty-one of America’s top 25 hotel markets are still in depression or recession, with revenues per available room – or revpar – well below pre-pandemic peaks, according to a new report from the American Hotel & Lodging Association based. on May data. .

While leisure travel has rebounded in recent months, the majority of major US hotel markets are in urban areas and face a slower pace of recovery while waiting for business and group meeting travel. resume.

For travelers, these lower occupancy levels usually mean reduced fares.

“You can find resorts where prices have fully returned to 2019 levels or maybe even beyond, but in general the rates are still chasing occupancy,” said Chip Rogers, President and CEO. from AHLA. “In a lot of your big cities, city markets… you’re going to find some really good deals.”

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Urban hotel markets are still recovering, which could mean cheaper rates

According to AHLA, seven of the major US hotel markets – including San Francisco, New York and Washington, DC – are still in depression, with revpar down more than 50% from May 2019. Fourteen others remain in recession, with a revpar down 20 to 50%.

“It’s a sober reminder that the industry is still in the embryonic stage of any kind of recovery,” Rogers said.

Resort markets and smaller metro markets are stabilizing, but urban markets have seen May’s revpar cut in half between 2019 and 2021. Lack of travel in these areas means prices are still below pre-peak peaks. pandemic, Rogers said.

Data from hotel data tracking company STR shows average daily US room rates to hit $ 128.90 the week of June 13, down 4.4% from the same week in 2019 Rogers said urban market hotel rates will likely stay below 2019 rates through the end of 2023.

Beach markets, however, are a different story.

These destinations have been successful in attracting travelers during the busy summer months. Miami’s revpar rose 31% in May from May 2019, according to AHLA, and STR data shows the city’s daily room rates jumped 45% from 2019 figures the week of June 13. at $ 221.42.

Although some markets are successful during the summer travel months, the US hotel market as a whole remains in recession, according to AHLA. Rogers said leisure travel only accounts for about 40% of the industry’s annual revenue, with the rest coming from areas like business travel, meetings, conferences and conventions.

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When do city hotel markets have the best deals?

Hotels in urban markets like New York City typically charge the highest rates on Mondays and Tuesdays to meet business travel demand, but Rogers said its pricing strategy has changed.

“The demand is more on weekends now,” he said. “You see hotels recognizing what the consumers are out there, and right now it’s the leisure travel consumer. ”

Rogers does not expect business travel to return to pre-pandemic levels until 2023, and said recovery efforts could be hampered by the shift of the U.S. workforce to work in distance.

“Places like New York and Washington, DC, and Boston, those downtown urban downtown areas… if people are still working remotely through the fall and through the end of the year, then travel business are going to have a hard time, ”Rogers said.

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How much do hotel rooms earn in major US hotel markets?

Major US hotel markets are seeing lower revenue per available room in 2021, which may mean room rates are lower. Here’s how the revpar changed for major US hotel markets between May 2019 and May 2021, according to AHLA:

  • San Francisco: -70%, from $ 203 to $ 62
  • Boston: -67%, from $ 184 to $ 61
  • Washington, DC: -65%, from $ 145 to $ 51
  • New York: -62%, from $ 249 to $ 95
  • Chicago: -59%, from $ 126 to $ 52
  • Seattle: -56%, from $ 122 to $ 54
  • Minneapolis: -51%, from $ 81 to $ 40
  • Philadelphia: -46%, from $ 117 to $ 64
  • New Orleans: -41%, from $ 115 to $ 68
  • Island of Oahu, Hawaii: -38%, from $ 185 to $ 114
  • Denver: -38%, from $ 102 to $ 63
  • Nashville: -37%, from $ 123 to $ 77
  • Orange County, California: -33%, from $ 117 to $ 79
  • Detroit: -31%, from $ 71 to $ 49
  • Orlando, Florida: -30%, from $ 91 to $ 64
  • Los Angeles: -27%, from $ 137 to $ 100
  • Saint Louis, Missouri: -27%, from $ 77 to $ 57
  • Houston: -25%, from $ 72 to $ 54
  • Dallas: -23%, from $ 77 to $ 59
  • Atlanta: -23%, from $ 79 to $ 60
  • San Diego: -23%, from $ 122 to $ 94
  • Phoenix: -6%, from $ 83 to $ 78
  • Norfolk / Virginia Beach, Virginia: + 1%, from $ 76 to $ 77
  • Tampa, Florida: + 10%, from $ 95 to $ 104
  • Miami: + 31%, from $ 136 to $ 178
  • United States: -22%, from $ 91 to $ 69


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