Pandemic sinks hotel occupancy rate by 75%
Hotel room occupancy in Central Florida plummeted 75% during the third week in March compared with last year, a new report shows, as the region’s top industry continues to take a beating from the coronavirus pandemic.
In the tourism-driven Orlando economy, the report reveals that nearly 100,000 hotel rooms in Central Florida have been left unoccupied during the pandemic, which has so far killed 22 people in the state.
The average revenue earned per available room, a key metric in the industry, cratered to $21.13, or 84% less than the average during the same time period last year. During the first week of March this year, that number was $106.46, according to the report released by the industry tracking firm STR.
The report is a stark indication of how much money hotels in Central Florida have already lost, and the worst is still expected to come.
During the week of March 15-21, 23.2% of hotel rooms were occupied compared to 91.6% in
2019.
“It’s mind-boggling,” said Bruce Siegel, interim general manager of B Resort & Spa near Disney Springs. “In the Orlando market, there is no such thing as occupancy that low. Twenty-three percent is unheard of here.”
Siegel, who has worked in the hotel industry 30 years, said he has had to furlough 90% of his hotel staff because of the coronavirus pandemic.
The hotel this week introduced a special rate for first responders and people displaced by the outbreak.
“It’s what we have to deal with, and we are trying to be creative,” Siegel said.
The Orlando market woes mirror the struggles that the industry has been experiencing across the country.
“[Room revenue] decreases are at unprecedented levels, worse than those seen during 9⁄11 and the financial crisis,” said Jan Freitag, STR’s senior VP of lodging insights, in a news release. “Seven of 10 rooms were empty around the country. That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further.”
A rash of event cancellations will likely stress the industry even more, with the number of people staying at hotels as part of industry or trade groups down nationally to about 1% of normal levels, Freitag said.
“The industry is no doubt facing a situation that will take a concerted effort by brands, owners and the government to overcome,” he said.
As of Wednesday morning, there are 1,682 cases in Florida, over 55,200 cases nationwide and over 438,700 globally, according to the Johns Hopkins University & Medicine Coronavirus Resource Center. More than 800 people have died in the U.S., along with 19,675 worldwide.
Siegel said the uncertainty has become one of the biggest challenges facing hotel owners and general managers.
“There is no due date on when this will end or when the remedy is coming,” he said. “It’s day by day and you have to react day by day.”