Holiday Weekend Boosts Hotels
The U.S. summer travel season kicked off with hotel occupancy reaching a level not seen since February 2020, before the pandemic hit the hospitality industry.
Memorial Day weekend performed largely as expected by pushing the average U.S. hotel occupancy to 68.1% last week, an 8.2 percentage point increase from the prior week, according to data from the hotel industry research firm STR, which is owned by CoStar Group.
Higher occupancy brought significant increases in revenue per available room and the average daily rate, two other key performance metrics for the lodging industry.
“Now the question is what happens to summer demand,” said Kelsey Fenerty, a senior research analyst with STR.
Weekend occupancy hit 78.3%, boosted by travelers hopping on airplanes at U.S. airports at the highest level since the pandemic was official in mid-March of last year.
Transportation Security Administration data showed 1.96 million people passed through airport checkpoints on Friday, May 28. The number is roughly 600,000 less than the same Friday before Memorial Day weekend in 2019.
Beach locations led the 25 largest U.S. hotel markets tracked by STR. Miami, which has been at the top for several weeks, averaged 74.4% occupancy for the week, which was better than Miami's same week in 2019. Tampa, Florida, was a close second with 73.7% occupancy, followed by San Diego and Norfolk-Virginia Beach, Virginia, with each performing better than they did in 2019.
Punch Bowl Social Founder Buys in the Big Easy
Robert Thompson, founder and former CEO of the once fast-growing Punch Bowl Social retail concept before the pandemic emptied locations, has shifted his focus to a hotel and restaurant in New Orleans.
Thompson, who left Punch Bowl Social last year, has founded Angevin & Co. to focus on buying boutique hotels. He bought the Frenchman Hotel, a 27-unit property in New Orleans with a restaurant built in 1860 for the new company's first deal, according to an announcement from the firm.
Before the pandemic struck, Punch Bowl Social had grown to about 20 locations, which each featuring bowling, old arcade games, pool and other entertainment mixed with a menu of craft beers, cocktails and food made from scratch.
All locations shut during the pandemic, causing significant financial distress for the company. Several locations closed for good. Others have reopened or plan to reopen.
Punch Bowl Social filed for Chapter 11 bankruptcy protection in December. In April, a Delaware bankruptcy court approved an exit plan that puts the company’s ownership into the hands of its primary lender, Austin, Texas-based CrowdOut Capital.
Thompson left the company in August with plans to start a new private club concept but earlier this year he and his family left Denver, where he opened the first Punch Bowl Social and moved to New Orleans.
Thompson said in a statement that the move returns him to his southern roots and allows him to spend more time with his wife and two sons.
“New Orleans is an ultra-special place for me, steeped in history and culture, and Frenchmen Street is an iconic representation of what makes the city unlike anywhere else in the world,” he said in the statement.
The hotel will go through a top-to-bottom renovation that includes updates to rooms and revitalizing two bars.
Frenchman Street is near the French Quarter’s Bourbon Street. The Frenchman area is an arts and entertainment district known for being frequented by residents, while Bourbon Street tends to draw tourists.
Payrolls Grow as Jobless Claims Fall
Payroll company ADP reported that companies expanded their payrolls by nearly 1 million people in May, led by jobs in the leisure and hospitality sector, while jobless claims decreased to another pandemic low.
ADP said private payrolls grew by 978,000 in May, nearly equally split between small, medium and large companies, far surpassing forecasts of 680,000 for the month. It also is a big increase over April’s 654,000 jobs, a revised number downward from the original ADP report of 742,000.
The services sector represented the bulk of the increase with 850,000 jobs. Leisure and hospitality businesses accounted for 440,000 jobs with education and healthcare coming in second with 139,000 people added to payrolls.
ADP’s number could signal a strong report from the Labor Department on Friday, though the department’s April report that 266,000 jobs had been added was disappointing.
Robert McNab, an economist and director of the Dragas Center for Economic Analysis and Policy at Old Dominion University, said last month that the April report seemed ripe for revision.
Meanwhile, the Labor Department reported that weekly jobless claims dropped to 385,000 last week, the lowest level since mid-March last year. The previous week’s number was revised lower by 1,000 to 405,000.