Many people in the hotel industry have seen downturns before. No one has seen anything like this.
The latest Smith Travel Research weekly data show that the trouble is worsening for domestic hotels, and as has been the case since the economy got clobbered and the backlash began against high-end spenders last fall, the luxury segment continues to take it on the chin.
For the week ending March 28 (compared with the similar week last year), industry revenue per available room (RevPAR) was down 20 percent across all segments. RevPAR is the key metric in evaluating hotel performance. Occupancy was down 12.3 percent and average daily room rates were 8/8 percent. Easter fell during the same week last year, it should be noted.
In the staggered luxury segment, RevPAR was down 28.9 percent, occupancy was off 11.4 percent and average room rates were down 19.8 percent -- the last an indication that the luxury hotels are now widely cutting rates, which they are loathe to do. (Instead they prefer to hide rate reductions inside various promotional offers like chits for meals and three-nights-for-the-price-of-two offers).
New York City, long the holdout on rates and revenue, has come tumbling down. RevPAR across all segments of New York hotels was down 39.6 percent; occupancy down 15.9 percent and average daily rates down 28.2 percent.
Orlando also is reeling. RevPAR there was down 35.4 percent; occupancy down 26 percent and rates down 12.7 percent.