Hotel Occupancy Slips
Many travelers hit the road and the air leading up to the Fourth of July, but it didn’t push U.S. hotel occupancy higher. Instead, occupancy fell back, suggesting that a hotel stay wasn’t in the plan for many.
U.S. occupancy dropped from nearly 70% the previous week to 65.4% this past week, according to the latest data from hotel industry research company STR, which is owned by CoStar Group.
Kelsey Fenerty, a senior analyst with STR, said the week is likely just a blip. Occupancy this week should be higher, Fenerty said.
The lower occupancy defies the higher air and automobile travel leading into the weekend. Nearly 2.2 million people passed through airport security checkpoints last Friday, the most since March 5 last year, according to data from the Transportation Security Administration. AAA estimated more people traveled by automobile over the weekend this year than they did in 2019.
But demand for room nights was 1.6 million lower for the week ending July 3 than the previous week. There were 1 million fewer room nights on the weekend than the previous weekend, according to Fenerty.
The lower demand dropped weekend occupancy to 73.3% from 82% on the previous weekend.
Perhaps travelers stayed with family or they shifted to short-term rentals instead of hotels. Reservation volume across the U.S. was up 32% for the July Fourth weekend compared to 2019, according to Guesty, a property management software platform for short-term rentals.
Labor Day could be better for short-term rentals. Guesty’s data shows reservation volume is 35% higher than Labor Day 2019.
Around the country, several of the 25 largest tourism destinations saw occupancy rise above 2019 levels, however.
Denver rose to the top spot to knock Oahu, Hawaii, to No. 2 in occupancy. The Mile High City’s occupancy rose to 80.5% last week from 74.3% in the previous week and Seattle had a big gain as well, rising from 65.6% to 70.6%, with the record-high temperatures in the West possibly playing a contributing factor as people without adequate air conditioning sought refuge from the heat.
Hotels in Phoenix, Dallas, Houston, Detroit, Nashville, Tennessee; and Tampa, Florida, also performed better than in 2019.
Biden Looks at Shipping Prices
President Biden reportedly could issue an executive order that targets consolidation and possible anticompetitive pricing in the ocean shipping and railroad business.
Biden’s order will direct the Federal Maritime Commission and the Surface Transportation Board to look at how consolidation and price has made transporting goods costly for American companies, the Wall Street Journal reported.
According to the report, the administration was prompted to take the step because the small number of companies in both ocean shipping and U.S. freight rail has meant unreasonable fees.
That could make a deal between Kansas City Southern and the Canadian National railways more difficult to close. Canadian National knocked Canadian Pacific out of the running in May when it offered $33.6 billion for Kansas City Southern.
The acquisition would stitch together a freight rail network from Canada through the U.S. and into Mexico connecting seaports in all three countries.
New Jobless Claims Tick Up
New jobless claims ticked up slightly last week while the number of people using full unemployment benefits declined.
The Labor Department reported Thursday that 373,000 people filed new unemployment claim. That’s 2,000 higher than the previous week’s 371,000, which the agency had revised upward by 7,000.
New claims exceeded the 350,000 estimate of those surveyed by Dow Jones.
The number of continuing claims, which represents those who are still using benefits, fell 145,000 to 3.34 million.
Some analysts credited the drop to the number of states ending all or portions of enhanced federal benefits.
Roughly half of U.S. states have ended those benefits, which were set expire on Sept. 6.
Businesses across the spectrum, but particularly restaurants, have complained that those benefits have hindered their ability to hire.
Tim Dillard, owner of an Express Employment Professionals franchise in Flowood, Mississippi, told the Wall Street Journal that his business picked up once Gov. Tate Reeves ended the benefits in mid-June.
“It’s almost like someone turned the faucet on,” Dillard told the Wall Street Journal.
Joseph Brusuelas, chief economist for accounting consulting firm RSM US, however, took a different view of the latest data, writing in a blog post that the Labor Department’s report “continues to imply that this policy shift has not been decisive in sending people back to work.”
Brusuelas wrote that the data “shows that ending the benefits was almost surely not part of June’s gain of 850,000 jobs, and we do not think it will play a meaningful role in the robust employment gains we expect this summer.”