The Download: More than 962 million hotel room nights have gone unsold through last week, about 46 percent more than all of last year. Based on current occupancy rates, the lodging crisis will continue to plummet as spiking COVID-19 cases derail travel. The U.S. hotel industry is finishing up the year with a rock-bottom milestone: one billion empty rooms for one year. Last year, the occupancy rate for the country’s 5.3 million hotel rooms was 66 percent. Just short of a record high, that percentage still accounts for more than 650 million rooms nights unsold.
Why It Matters: In a normal, non-pandemic year, vacant rooms are an expected cost in an industry that rents space by the night to travelers who sign annual leases on apartments and longer contracts for corporate offices. This year has been far from normal, with 350 million extra unsold nights. That comes with a hefty cost: Based on an average nightly rate of $131, hotel owners have lost nearly $46 billion in revenue. That profit gap will result in the closure of numerous properties without a new round of federal stimulus.
In Their Words: “If there’s no relief before the holidays, I don’t know how many hotels will continue,” says Bijal Patel, chairman of the California Hotel & Lodging Association. “Many of us are going to be on the brink of shutting down.”
Surface Says: Take advantage of the low rates. Forecasts predict that revenue per available room, which factors in pricing and occupancy, may not return to previous levels until 2024 at the earliest.