BY APRIL, THE hospitality industry had dropped so far down the COVID-19 pandemic well that it seems best to track signs of recovery through month-to-month analysis rather than year-over-year, according to Hotstats. Taken on that level and based on data coming from Asia, however, an upswing may be a month away.
With much of the world’s markets still shut down, gross operating profit per available room was down substantially in April compared to the same time last year, including a 122.8 percent dip for the U.S., according to HotStats.
“As world cases of COVID-19 continue to mount, the travel industry is bearing a large brunt of the pain, especially when looking back on April, a month where many hotels remained shuttered to guests who, regardless, weren’t vigorously booking rooms,” wrote David Eisen, HotStats’ director of hotel intelligence and customer solutions. “The numbers were a trend that started in China in February, after the late-January Wuhan shutdown, and were carried forward like a contagion across the globe, showing no let-up.”
April showers
RevPAR for April declined 95.2 percent to $8.81 and was down 42.8 percent to $97.43 year to date. TRevPAR went down 95 percent to $14.40 for the month, 41.3 percent to $159.32 for YTD.
“April was an especially brutal month for New York, the epicenter of the COVID-19 pandemic in the U.S.,” Eisen wrote. “Deaths from the disease spiked in the month. The good news is that new cases ebbed toward the back half of the month, a trajectory that continued through May. New York City hotels saw GOPPAR collapse to negative $50.60, a 145.7 percent drop over the same time last year.”
Around 70 percent of U.S. hotel rooms were empty, Eisen wrote citing data from the American Hotel & Lodging Association, and thousands of hotels were completely closed.
“For the hotels that remain open, operators have significantly scaled down operations by closing guest room floors and meeting spaces and suspending F&B outlet operations. While many variable costs have been removed, some fixed costs remain that are not impacted by fluctuation in occupancy or sales,” Eisen wrote. “As a result of scaled-back operations, total overhead costs were down 66.6 percent YOY, while total labor costs came down 73.5 percent YOY. All undistributed expenses were down double-digit percentages YOY. Cost savings, however, did not cushion profit. For the second consecutive month, GOPPAR turned negative to minus $26.34, a 122.8 percent YOY decrease and 107 percent greater than March.”
May flowers?
The Asian-Pacific market, including China where the coronavirus outbreak began, was still seeing signs of steady recovery, though GOPPAR was still down 124.1 percent from last year.
“Though Asia-Pacific as a whole displayed numbers indicative of the time, China, while still in a soporific state, is trending upward,” Eisen wrote. “For the second consecutive month, occupancy rose, up 10 percentage points over March though still down 44.5 percentage points YOY. Across the board, key performance indicators saw incremental improvement, including TRevPAR, which showed a 73 percent improvement on March to $30.29.”
