STR Analyzes Hurricane Harvey Impact on Hotel Markets
Four Houston submarkets and the southern Louisiana area reported significant occupancy declines in the days following Hurricane Harvey’s U.S. landfall.
All Houston hotel submarkets reported occupancy growth after the initial days of Hurricane Harvey. However, four of 13 STR-defined submarkets reported a year-over-year occupancy decline during the nine-day period analyzed by STR’s Consulting & Analytics department. Additionally, significant occupancy decreases were reported in the southern Louisiana area.
“Double-digit occupancy declines were seen throughout a majority of the Houston market up until August 27 when hotels began filling up with displaced residents, FEMA and other demand related to recovery efforts,” said Ali Hoyt, STR’s senior director of consulting and analytics. “The four submarkets directly affected by Hurricane Harvey saw occupancy decline over the nine-day period we analyzed, but most other areas reported double-digit growth during that time. We also saw outlying markets like Austin, Dallas and San Antonio pick up additional demand likely due to shelters remaining full in the Houston area.”
The four Houston submarkets to report an overall occupancy decline from 25 August through 2 September were the Houston CBD (-23.2% to 46.3%), Houston Galleria/Greenway Plaza (-4.3% to 57.2%), Beaumont (-12.2% to 55.4%) and Galveston/Texas City (-21.4% to 41.9%).
Galveston, which is a submarket of less than 7,000 rooms, reported the largest performance drop over the nine-day stretch, with revenue per available room down 42.1% to US$41.30.
The Houston North/Woodlands and Houston George Bush Airport Area submarkets saw the largest occupancy increases at 42.3% and 38.3%, respectively.
“The northern suburbs area was expected to be less affected by the storm’s ferocity and was viewed by many to be a safe evacuation point,” Hoyt noted. “The airport was a logical place for immediate hotel demand as so many flights were canceled.”
In Louisiana, the Louisiana South and New Orleans markets saw occupancy decreases of 38.3% and 22.6%, respectively.
“Unlike Hurricane Katrina, we haven’t seen a significant amount of rooms go offline due to storm damage,” Hoyt said. “However, we will assume there was damage to some construction sites, so there may be a delay or even attrition with the 5,247 hotel rooms under construction across the Houston market,” Hoyt said.
STR provides clients from multiple market sectors with premium, global data benchmarking, analytics and marketplace insights. Founded in 1985, STR maintains a presence in 10 countries around the world with a corporate North American headquarters in Hendersonville, Tennessee, and an international headquarters in London, England. For more information, please visit str.com.
Categories: Market Reports