Hotels and retail were the two real estate sectors hardest hit by the COVID-19 pandemic. However, they both seem to be showing signs of reaching pre-pandemic activity levels, Bisnow reports…
According to STR specialists, the occupancy rate of hotels in the United States for the week of June 27 to 3 was 65.4%. The occupancy rate was only slightly less, at 10 basis points, than in the same week in 2019. Meanwhile, the hotel’s average daily rate was 5.8% higher than in 2019 ($ 135.35). According to STR, revenue per available number in 2021 was $ 88.51, up 5.7% from 2019.
However, the data varied depending on the hotel market. For example, according to STR, only Phoenix and Detroit saw double-digit growth in occupancy rates (14 and 13.1 percentage points, respectively) among the 25 largest US markets compared to 2019. Meanwhile, the San Francisco / San Mateo market experienced the largest decline in occupancy compared to 2019 – by 32% to 50.9%. The hotel market is gradually returning to normal, but problems remain, Bisnow said. US hotel gross operating margins are currently 70% of their 2019 level, according to STR.
“May was another step forward as the resurgence of economic activity and increased demand helped further the profitability of the entire industry,” said Raquel Ortiz, STR Deputy Chief Financial Officer, in a statement. “While the improvement is encouraging, many hotels are still struggling financially and more people are facing staff problems, as evidenced by stagnant labor costs.”
Shopping malls are also booming
Placer.ai reported that the number of indoor shopping mall visits fell by just 8.1% in June compared to 2019 – an improvement from May, when visits fell 8.3%. Overall, this is a significant shift from April, when visits to indoor shopping centers decreased by 15.7% compared to April 2019. The second quarter of this year showed one of the biggest signs of improvement in the retail sector.
Attendance at outdoor shopping malls in June decreased by only 5.6% compared to the same month in 2019. June was below the rate of May, but visits fell by less than a percentage point from the rate two years ago. Placer.ai predicts that retail will get a boost when repeat school purchases begin, creating additional traffic.
“The 2019 iteration of Back-to-School shopping was particularly successful, setting a very challenging bar for the 2021 season,” wrote Ethan Chernofsky, vice president of marketing for Placer.ai. “If the interval of visits continues to shrink, this will be an extremely strong signal for the retail sector. However, even if the gap widens, it may have more to do with the heights achieved in 2019 than with the pace of recovery in 2021. ”
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