The Transportation Security Administration records more than two million travelers daily for the first time since March 7th last year, GlobeSt.com Reports. It’s a significant increase after 14 months when the COVID-19 pandemic hit the United States. The increase in air travelers has contributed to the recovery in the hospitality industry, according to a current analysis of the stairs.
Data points show that the share of non-agricultural workers in the leisure and hospitality industry was around 10% in May, according to Fed economic data. That’s an improvement from the April 2020 low of 6.6% and almost close to the pre-pandemic 11% level. The default rate of Commercial Mortgage Backed Securities (CMBS) for hotel properties also fell to 14.2% in May, according to Trepp. The rate of hotel failures reached an all-time high of 24.3% last June.
A closer look at the hotel data shows how much the COVID-19 pandemic has affected the accommodation industry. Room revenue per key for hotels that support CMBS declined significantly in four major states from 2019 to 2020. California ($ 80,288 in 2019 to $ 30,834 in 2020) and New York ($ 49,217 to $ 23,059) saw the largest drops in room revenue per key. Hotels in Florida ($ 40,387 to $ 28,637) and Texas ($ 30,546 to $ 25,301) also saw significant revenue declines. Texas was the only one of the four states where operating expenses per key and net operating income (NOI) did not decrease from 2019 to 2020, reports GlobeSt.com.
Airport hotels H it Hardest
Airport hotels were hardest hit in the lodging industry during the pandemic. The NOI per key of these hotels decreased by almost 70% in 2020 compared to 2019. Meanwhile, the airport hotels’ total revenue decreased by about 50% during this period, while the total cost of ownership per key decreased by 41% and the NOI per key decreased by almost 69%. The total investment costs of the airport hotels per key decreased by a little more than 50%.
According to Trepp analysts, despite these figures, the hospitality industry still has a lot of hope for the future.
“As tourism and business travel continue to pick up this year, it will be interesting to see the impact on hotels that serve as collateral for CMBS loans when they release their quarterly reports.”
Finance, ”wrote Jyoti Yadav von Trepp in a recent analysis of the data. Yadav noted that the latest STR numbers show that the occupancy rate in the US hit 61.9% in the week ended June 5. With higher occupancy reported every week, it seems that the hotels are on the way to a return to a pre-pandemic time. “
Joe Dyton can be reached at joed@fifthgenmedia.com.
