Greater than half the rooms at budget hotels nationwide were vacant in the course of the first three months of 2024 as inflation-battered travelers in the reduction of on spending, in keeping with the most recent data from the hotel industry.
Hotels like Econo Lodge, Days Inn, Super 8 and SureStay posted occupancy rates of 48.7% in the primary quarter – down 5% from a yr ago, in keeping with preliminary first quarter data from STR/CoStar, which tracks the hotel industry.
The 51.3% emptiness rate has led to revenues per available room dropping 6.5% from the identical period a yr ago, the biggest decline amongst all hotel segments, the information showed.
Budget hotels are performing the worst of all hotel segments, in keeping with data from STR/CoStar, which tracks the hotel industry. AP
The outcomes are “weaker than we thought,” Jan Freitag, national director for hospitality market analytics at CoStar, told The Post on Tuesday.
Midscale hotels, the following level up from economy that include chains like Best Western, saw revenue per room drop 4.5%. Upper-midscale hotels, equivalent to La Quinta, declined 2%. At the opposite end of the spectrum, luxury hotels suffered only a 0.3% revenue drop, while upper upscale and upscale lodgings increased 3% and 0.4%, respectively.
“We’re seeing a bifurcation within the US lodging industry, where higher-end hotels proceed to perform well from increases in corporate travel and continued healthy demand from high-end leisure travelers, [while] people in a selected income level are traveling less,” Freitag said.
The national average hotel room rate was $70 in the primary quarter down 4% from a yr ago. MelissaMN – stock.adobe.com
Room rates for luxury hotels are essentially flat from a yr ago at $453 per night on average, while rates at economy properties are down 4% over the identical period to a median of $70 per night, in keeping with STR/CoStar data.
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In March, the occupancy rate at lower-end hotels was 53% in comparison with 71% in the posh market, in keeping with STR/CoStart data.
The actual revenue decline within the economy sector is probably going greater since the variety of rooms have decreased by 2% as among the hotels have simply closed or were converted to residential properties over the past yr, in keeping with the research firm.
Rising automobile insurance and housing costs are aspects depressing budget hotels’ performance. Zoran Zeremski – stock.adobe.com
Booming infrastructure projects in Sunbelt states have helped keep some economy hotels filled up, in keeping with a report. Bill – stock.adobe.com
There are other signs that buyers on a good budget are pulling back.
In January, an American Hotel & Lodging Association survey found that 56% of consumers who earn lower than $50,000 said that inflation would play a major role in reducing the probabilities of them staying in a hotel over the following 4 months, while just 51% of individuals earning $100,000 or more said that inflation was a think about booking a hotel stay over the identical period.
But some budget properties are doing well, particularly in Sun Belt cities where a variety of infrastructure projects are fueling demand for cheap rooms, in keeping with a report in Skift.
Among the many rising costs from a yr ago weighing on consumers are automobile insurance (up 22.2%), automobile repairs (11.6%), rent (5.7%), housing (4.7%) and transportation up (4.2%), in keeping with government data.
