CLEVELAND, Ohio — Hotel occupancy in Cleveland and Ohio in recent weeks has increased slightly, suggesting that the tourism industry may have hit rock bottom and is starting to recover.
The Cleveland region saw a modest increase in hotel occupancy for the week ending April 25, to 21.5%, up from 17% two weeks earlier, according to travel research firm STR. In Ohio, occupancy increased to 24.4% during that same week, up from a low of 20.2% two weeks before.
But don’t read too much into the uptick, cautions Joe Savarise, executive director of the Ohio Hotel and Lodging Association.
The occupancy increase likely reflects the growing number of Ohio hotels that have shut down due to the coronavirus pandemic. A smaller number of available rooms may make it look like demand is increasing, when in fact, it’s supply that is decreasing.
“We can’t say that things are trending up,” said Savarise, who called the new numbers a “false positive.”
He said approximately 30% of Ohio’s 1,500 hotels have closed in recent weeks. Some will not reopen.
At last count, at least two dozen hotels in Greater Cleveland had closed, including the Westin Cleveland Downtown, the Marriott Cleveland Downtown at Key Tower, the Intercontinental Suites Cleveland and the Embassy Suites Cleveland-Rockside.
Savarise said he doesn’t expect that May occupancy rates will be much better than April, although some closed properties are making plans to reopen. “We do have hope for June,” he said.
Ohio Gov. Mike DeWine last week extended the state’s stay-at-home order through May 29 (renaming it the Stay Safe Ohio Order), although some businesses have been given permission to reopen this month. Retail stores, for example, may reopen starting May 12.
Hotels, meanwhile, are considered essential businesses and many remained open throughout March and April. But occupancy numbers were dismal. Nationwide, hotel occupancy for the week ending April 25 was 26%, up from a low of 21% two weeks earlier, according to STR.
“Demand has grown slightly across the country during the last two weeks, which could provide some hope that the levels seen in early April were indeed the bottom, especially with some states now moving to ease social distancing guidance,” said Jan Freitag, STR’s senior VP of lodging insights. She added that part of the occupancy increase in recent weeks could be attributed to overnights from hospital and other essential workers, who are likely staying for free or at a steeply discounted rate.
The average overnight rates at hotels have declined dramatically, to $73.61 for the nation, down 42.9% from a year before. In the Cleveland region, the average daily rate was $64.23 for the week ending April 25, down from $99.89 a year earlier, according to STR.
Laurel Keller, senior vice president with Newmark Knight Frank in Cleveland, said it’s too early to tell if the hotel industry is on the upswing. She said the partial resumption of business in the state, starting this week, should improve hotel demand, particularly in the corporate segment. “But group demand will not return for a while due to continued restrictions on public gatherings,” she said.
Leisure travel, she said, remains a wild card. The delayed opening of places like Cedar Point and the Cleveland Indians season, and the cancellation and postponement of concerts, festivals, and events will continue to affect demand. The record number of Ohioans who are out of work also will depress hotel occupancy, she said.
On the other hand, she said, if infection cases continue to decline as Ohio opens back up, she anticipates an uptick in demand this summer. “Too soon to tell, but I’m definitely hoping for the best,” she said.
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