Austin hotels suffered biggest drop in revenue ever due to COVID-19

Hotels in the Austin area suffered the largest drop in revenue – and the largest in Texas, according to a consulting firm known as an economic bloodbath.

A report released on September 15 by San Antonio-based hotel consultancy Source Strategies Inc. shows that hotel sales in the Austin area fell 79.7 percent in the second quarter of this year from the second quarter of last year. The load factor fell to 32.8 percent after 76.8 percent in the second quarter of the previous year.

Nationwide, hotel income fell by 64.1 percent, while occupancy fell to 35.8 percent.

To put this data in perspective, the losses in the second quarter added up to more than the aggregate losses incurred during the Great Recession, according to Source Strategies.

“This is an economic disaster on a scale never seen before, and we’ve covered the Texan accommodation industry for more than 30 years,” said Todd Walker, president of Source Strategies’ president, in a press release. “Hotels are under extreme financial pressure right now and many will not survive if this low demand continues into the next year.”

While the Austin hotel industry saw the state’s biggest drop in revenue in the second quarter, the other major metropolitan areas of Texas couldn’t escape the damage caused by the coronavirus pandemic. Hotel revenues fell in the second quarter:

  • 74.1 percent in the San Antonio market with a 31.6 percent occupancy rate. In the second quarter of last year, the occupancy rate was 67.6 percent.

  • 72.9 percent on the Dallas market with 32 percent occupancy. In the second quarter of last year, the occupancy rate was 72 percent.

  • 70 percent on the Fort Worth Arlington market with a 31.1 percent occupancy. In the second quarter of last year, the occupancy rate was 65.9 percent.

  • 61.4 percent on the Houston market with 37 percent occupancy. In the second quarter of last year, the occupancy rate was 65 percent.

The Texas markets that had the best financial performance in the second quarter were Corpus Christi and Brownsville-Harlingen, where hotel revenues fell less than 20 percent, the report said.

The state’s top RevPAR artists were mostly on the Gulf Coast in places like Galveston, Port Aransas, and South Padre Island. The San Luis Hotel in Galveston ranked first RevPAR in the state in the second quarter at $ 148.06. This compares to $ 223.94 in Q2 2019 when it was number 17 nationwide.

Here are examples of how jumbled the second-quarter RevPAR numbers were for the state’s major metropolitan areas:

  • In 61st place, the Doubletree Hotel Austin took first place in the Austin market for RevPAR for $ 74.98. The statewide RevPAR ranking for the second quarter of last year was 316. Low-cost hotels dominated the rest of the RevPAR executives in Austin in the second quarter.

  • In the Dallas market, the Residence Inn Dallas West topped the list for RevPAR at $ 60.58, which is enough for 142nd place in the state. In the second quarter of 2019, the RevPAR was $ 98.16, ranking 550th.

  • In Arlington, the Residence Inn achieved a RevPAR of $ 99.34 for the second quarter, compared to $ 122.25 for the same period last year. The property rose from 248th place on the RevPAR list in the second quarter of last year to 10th place this year.

  • In Houston, the RevPAR for the Post Oak Hotel in Uptown fell from $ 203.83 to $ 90.17 in the second quarter, moving it from 27th last year to 23rd this year.

  • Hotel Emma in San Antonio ranked third in Texas for the second quarter of 2019 with a RevPAR of $ 300.94. In the second quarter of this year, the hotel’s RevPAR fell to $ 93.99, ranking 17th nationwide.

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