Travel

Hotels face drop in occupancy, revenue amid coronavirus outbreak

Key Points
  • Hotels are seeing occupancy rates and revenue per available room tumble as travelers stay at home during the coronavirus outbreak.
  • Global hospitality research company STR said Wednesday that for the week of March 8-14, hotel occupancy was down 24.4% to 53% year-over-year.
  • Meanwhile, revenue per available room, a key industry metric, fell 32.5% to $63.74.  
This photo taken on January 11, 2018 shows a woman walking past Marriott signage in Hangzhou in China's Zhejiang province.
- | AFP | Getty Images

Major hotel chains are temporarily closing properties and seeing occupancy rates tumble as travelers stay at home during the coronavirus outbreak.

Global hospitality research company STR said Wednesday that for the week of March 8-14, hotel occupancy was down 24.4% to 53% year-over-year. Meanwhile, revenue per available room, a key industry metric, fell 32.5% to $63.74.   

The numbers echo plunging demand for air travel and cruise ships as travel slows to a trickle. There have been more than 200,000 cases of the coronavirus so far, and governments are imposing restrictions to combat the spread. The United States border with Canada will temporarily close to "non-essential traffic" due to the coronavirus pandemic, the leaders of both countries said Wednesday morning.

"To no surprise, the hurt continued and intensified for hotels around the country," said Jan Freitag, STR's senior VP of lodging insights in a statement. "The performance declines were especially pronounced in hotels that cater to meetings and group business, which is a reflection of the latest batch of event cancellations and government guidance to restrict the size of gatherings."

Even before Nevada ordered the closure of casinos and other businesses, MGM Resorts International and Wynn Resorts announced the temporary closure of their properties in Las Vegas. That includes well-known hotels like the Bellagio, MGM Grand Mandalay Bay, The Mirage and others.

Following the closure of its U.S. theme parks, Disney closed all its owned and operated hotel locations at Downtown Disney in Anaheim and Disney Springs in Orlando, beginning Tuesday. The Disney owned and operated hotels at Walt Disney World Resort and Disney's Vero Beach Resort will close at 5 p.m. on Friday, March 20, the company said in a statement.            

Home share bookings in major cities are also feeling the pinch.

For example, Airbnb bookings for the week of March 1-7 in Rome and Beijing were down 41% and 96%, respectively, compared to bookings made January 5-11, according to AirDNA, which analyzes vacation rental data.

"2020 got off to a fast start with our booking rate quite high in the months of January and February," said Jon Ingalls, an Airbnb host in Seattle, "We've now had cancellations for March and have had virtually no bookings for the spring."

Checking in? Making sure your room is clean

If you do happen to be checking into a hotel in the near future, global and independent hotel brands such as Red Roof, Marriott International and Hilton are being proactive about sharing specifics about their cleaning efforts.

In addition to the cleaning and disinfecting protocols used in guest rooms, Marriott is reassuring guests that its hotels have increased the frequency of cleaning and disinfecting in public spaces, "with a focus on the counter at the front desk, elevators (and elevator buttons), door handles, public bathrooms and even room keys," the company said in a statement. 

As clean as hotels say their facilities are, when you check in you may want to do some spot cleaning of your own, especially on the "high touch" spots housekeeping staff may have missed and previous guests are sure to have touched. That includes door handles, TV remote controls, lamp switches, bathroom faucets, shower soap dispensers and the toilet flush handle.

"Hotel housekeeping may be doing a good job," said Sheryl Kline, a professor of Hospitality Business Management at the University of Delaware who has studied hotel cleanliness, "but if you bring your own wipes you'll know that those spots have been disinfected."

Kline also suggests taking bed scarves and bedspreads off hotel room beds, "because those may not be cleaned every day."

Spot cleaning your hotel room is fine, but Paul Pottinger, an infectious disease specialist at UW Medicine, the health-care system at the University of Washington in Seattle, says the first thing to clean when you enter a hotel room is your hands, "which may have picked up germs on your journey to the hotel, from surfaces in the lobby and in the elevator ride up to the room."

Need to cancel?

In general, hotels and home share companies are being flexible with cancellations.

On Sunday, Airbnb updated its extenuating circumstances policy regarding cancellation in response to COVID-19 to include a full refund for guests with reservations for stays (and Airbnb Experiences) made on or before March 14, 2020, with check-in dates between March 14 and April 14, 2020.

IHG, which includes brands like Holiday Inn, Intercontinental, and Kimpton, is waiving cancellation fees for existing and new bookings at all its properties globally for stays through April 30, 2020.

Marriott updated its policy on March 13 to allow guests with existing reservations to cancel or make changes without charges up to 24 hours before arrival, until April 30, 2020. And on March 16, Hilton updated its policy and is now waiving fees for changes or cancellations made up to 24 hours before a scheduled arrival until April 30, 2020 as well. That includes "Advance Purchase" rates described as non-cancellable when first booked.  

Given the fast-changing nature of COVID-19 and community responses, many hotels are following the lead of airlines and regularly updating their cancelation and refund policies, in many cases extending the applicable dates.