Hurricane impact leveling off in Texas, Florida
At the same time, performance growth in those markets is leveling off, according to a six-month analysis by STR’s Consulting & Analytics team.
"Historically, we’ve found that inflated performance growth lasts in a market for six to eight months after a hurricane hits,” said Hannah Smith, STR consultant.
"This is due to business from displaced residents, emergency and relief workers, insurance adjustors, media members, etc.
"The impact was immediately visible after both Hurricane Harvey and Hurricane Irma as Texas and Florida each reported double-digit growth in demand and revenue per available room in the months following the storms.
"The increases in those two states were enough to lift overall U.S. performance significantly during the fourth quarter of 2017. Through two months in 2018, the gap is shrinking.”
Houston showed double-digit growth in demand (room nights sold), occupancy and RevPAR for each month from September 2017 through January 2018. That streak came to an end in February as year-over-year comparisons were difficult to match to February 2017, when the market hosted Super Bowl LI.
However, Houston’s absolute average daily rate (US$112.39) and RevPAR (US$79.14) levels in February were each well above the 12-month moving averages in the market.
As indicated in STR’s Global Hotel Study: 2017, most Florida markets saw some form of demand and RevPAR increase in the aftermath of Hurricane Irma, specifically in October.
Markets such as Fort Myers and Miami have reported continued strong demand increases, likely supplemented by displaced residents from Hurricane Maria as well.
The Florida Keys, however, saw massive year-over-year decreases in demand (-45.6%) and RevPAR (-43.4%) in September 2017, and the decline in demand has remained constant through the early portion of 2018.
"Other than the Florida Keys, the U.S. markets most affected by the hurricanes of 2017 are showing a comparable performance line to the markets affected by Hurricane Andrew (1992), Hurricane Katrina (2005) and Hurricane Sandy (2012).
"When analyzing the hotel performance around the most destructive hurricanes on record, New Orleans after Katrina remains the anomaly because of the massive loss of room inventory and time needed before a return to normal performance levels.” ■