The ongoing government shutdown, the longest in U.S. history, is definitely being felt at hotels in Washington, D.C., Maryland and Virginia -- the backbone of the Beltway and the headquarters of multiple federal agencies -- while a drop in group demand is making stiff headwinds in Florida.
According to hospitality data analyst firm STR, the U.S. hotel industry reported negative year-over-year results in the three key performance metrics during the week of Jan. 6-12 compared with the same time period in 2018. Occupancy dropped by 5.9 percent to 53.5 percent, average daily rate slid by 2.3 percent to $125.69 and revenue per available room fell by 8 percent to $67.21.
However, those dips in percentages were much harsher in the Washington, D.C., Maryland and Virginia area, which registered the third-largest declines in each of the three key performance metrics. Occupancy fell by 20 percent to 47 percent, average daily rate dropped by 7.9 percent to $124.32, and RevPAR declined by 26.3 percent to $58.89.
Those numbers paint a very different picture from the one Destination D.C., the district's convention and visitors bureau, conveyed to Northstar Meetings Group in a recent Q&A, in which the bureau said the shutdown was having little impact.
According to STR analysts, the significant drops in the hotel industry's three key performance metrics were likely due to "government contractors postponing trips, which had an impact on hotel performance, as well as cancelled group travel due to the effects of the government shutdown."
Meanwhile of the top 25 markets, San Francisco/San Mateo, Calif., reported the only increase in RevPAR, increasing by 13.8 percent to $396.79, driven by a near 14 percent increase in average deaily rate, the only double-digit lift in ADR for the period, to $506.23. STR analysts believe the market's performance was helped by the 37th annual J.P. Morgan Healthcare Conference that took place over the measurement period, as well as the College Football Playoff National Championship. None of the top 25 markets experienced an increase in occupancy.
Orlando reported the steepest decline in RevPAR, dropping by 33.9 percent to $85.92, due in part to the largest drop in ADR, 16.6 percent, to $126.55. That market also registered the second-largest decrease in occupancy, dropping by 20.6 percent to 67.9 percent. STR analysts point to lower group demand (bookings of 10 or more rooms) as a factor in the overall performance decline.