More U.S. Hotel Closures Likely With Occupancy Rates Near 20%

(Bloomberg) -- Occupancy rates at U.S. hotels fell slightly to 22% in the week ending April 4, as social-distancing measures continued to batter travel companies.

The key industry metric fell below 20% in a majority of the 25 largest markets, according to lodging data firm STR.

With so few hotel guests, more properties are likely to close, according to a research note from SunTrust Robinson Humphrey.

“We assume the next shoe to drop will be further hotel closures where running sub 20% occupancy is unsustainable,” the note said.

Luxury hotels are taking a particularly hard hit as the pandemic shuts down travel. The occupancy rate at those properties was 5.5%, according to STR.

In New York, where owners have offered free or discounted rooms to doctors and nurses, occupancy rates increased to 18%.

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