Watching for the bottom of the travel market

Is it possible that we’re at the bottom of the travel market? Our friends at Hotel News Now have published what at first glance appears to be solidly dismal news. For the week ending April 4, the U.S. hotel industry had a weekly revenue decrease of more than 80% on a year-over-year basis.

That seems unlikely to change for quite some time, according to Jan Freitag, SVP of lodging insights at STR. “I think we should all wrap our head around minus-80%, minus-85% RevPAR (revenue per available room) declines going forward as the new normal,” Freitag said.

But here’s what seems most interesting to us. Every single one of the 645 U.S. submarkets tracked by STR has shown RevPAR declines for three weeks now.

Now we’re not saying the U.S. hotel market has hit a bottom and is poised for a bounce back. Nor is Freitag.

But if a full 100 percent of submarkets are posting declines, then things have hit a bottom of sorts. Certainly the declines themselves could get worse. And declines versus a year-earlier could go on for a long time.

But it’s impossible for more than 100 percent of markets to post declines.

That may not be good news. But it does give us an idea of where good news will emerge. Sooner or later, one submarket or another will begin to recover.

“Now we will track this number very, very closely, because obviously eventually somewhere a submarket will show positive RevPAR growth,” Freitag said.

Here at <intent> we have some ideas about the bottom of the travel market and which submarkets will show the first signs of recovery. Follow us on LinkedIn if you’d like to read about them in the coming weeks.

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