Hotel Rates Surge
U.S. hotel room rates and revenue soared above 2019 levels on July Fourth, with one key measure rising to a record high.
Hotel occupancy ticked up last week to 67.2% from 65.4% the previous week, according to data from hotel industry research firm STR, which is owned by CoStar Group.
Kelsey Fenerty, senior research analyst for STR, said occupancy is close to normal. “Rates are running the show now,” she said.
Rather than close off rooms because of staffing shortages, hotels have been raising rates with the surge in leisure travel to cover higher labor costs and recovery on debt service delayed throughout much of the pandemic, Fenerty said.
Occupancy on Sunday, July 4, for example, the start of the reporting week, was 18% better than on Sunday, July 7, 2020, the comparable day from last year. The average daily rate on July 4 was 27% better and revenue per available room was 49% better and a record high than the comparable day last year. Revenue per available room and average daily rate also were better than on July 4, 2019, which fell on a Thursday.
Basically, hotels are getting what they can now. Fenerty said rates probably will drop after Labor Day when leisure travel usually slows with the start of the school year but group travel hasn’t recovered enough yet to fill the gap.
Delta Air Lines Turns a Profit
Delta Air Lines reported a profit in its latest quarter with the help of federal government aid and strong leisure travel.
The Atlanta-based carrier reported a profit of $652 million for the quarter that ended June 30, according to the company’s earnings. It reported a $5.7 billion loss in the same quarter last year when air travel had ground to a near halt.
In a filing with the Securities and Exchange Commission, the company disclosed it received $6.4 billion from the Payroll Support Program created to help airlines under the federal aid package passed in December 2020 and extended in the next round of aid in March. It has an agreement for an additional $1.5 billion this year.
Delta reported total revenue of $7.1 billion for the quarter compared to nearly $1.5 billion last year and $12.5 billion in the comparable 2019 quarter. Passenger revenue in particular rose from $678 million last year to $5.3 billion in the latest quarter, less than half of 2019 levels, largely because business and international travel haven’t returned.
"Domestic leisure travel is fully recovered to 2019 levels and there are encouraging signs of improvement in business and international travel,” Ed Bastion, Delta's CEO, said in a statement.
Poll Shows COVID Concerns Rising
More than 70% of those responding in a recent Harris Poll said they feared more hospitalizations with the spreading Delta variant of the coronavirus. Roughly the same number fear healthcare shortages while 73% fear more deaths.
Doubt among the unvaccinated to get vaccinated despite the variant spreading is high. The poll found that 62% said that the “Delta variant makes me second guess whether I should even get vaccinated.” More than half of those who have been vaccinated said they now question the effectiveness of the jab they received.
News that Pfizer’s vaccine may not be as effective against the variant prompted 65% to say that could slow down vaccinations and 70% fear that the variant will inhibit the ability to reach herd immunity.
New confirmed cases have been on the rise, primarily among the unvaccinated. CNN reported that Johns Hopkins University data shows 31 states have experienced at least a 50% increase in cases from the previous week’s rate.