April 7, 2020

Hello,

To help keep our business community better informed, we are now sending a weekly email with notable tourism industry data, insights and analysis from Daryl Cronk, Visit Orlando's economist and head of research.

As you might expect, the news at this point is anything but positive. The current economic climate is the most difficult our destination has ever faced, and we've yet to hit the bottom. 

WEBINAR WEDNESDAY

Dive Into the Data: Join us tomorrow, April 8 at 10 a.m. Eastern, as we launch the first in a series of webinars to assist you during the COVID-19 pandemic. To get us started, Daryl Cronk will review key travel industry indicators and forward-looking data on Orlando's travel industry. He'll also examine how travel patterns from a past crisis could offer a glimpse into our future. Register here, and feel free to submit a question in advance

ORLANDO INSIGHTS

Occupancy Rates Plummet to 14%: Hotel occupancy in Orlando averaged just 14% the week of March 22-28, down 83.6% from the same week last year. The average daily rate dropped nearly 43% to $82.22, and revenue per available room (RevPAR) declined 90.6%. The national occupancy rate was 22.6% (down 67.5%) and the state occupancy rate was 20.4% (down 75.6%). The lowest occupancy rate among the top U.S. lodging markets was Oahu, Hawaii (10.5%) followed by New Orleans (12.7%) and San Francisco (13.8%). The highest occupancy rates were Norfolk-VA Beach (28.8%), Atlanta (27.0%) and Houston (25.6%).

Hotel Bookings Down 78% in April: Looking ahead, advance hotel room bookings in the Orlando market are showing a 78% decline for April, with group bookings down 94% and leisure down 70%. The decline begins to soften as we look to summer, with a 44% decrease in May and 25% drop in June. July and August bookings are showing declines of 15% and 14%, respectively. These numbers are likely to continue to fall, however, due to the high degree of uncertainty surrounding COVID-19 and travel/mobility restrictions.

4 in 5 Have Delayed Travel Plans: Eighty percent of consumers who were planning a domestic or international trip have delayed those plans, according to a consumer survey we conducted March 25-27. Eighty-four percent responded they were likely to change or cancel their plans for coming to Orlando. Those with children in the household are significantly more likely to delay or cancel their travel plans than those without; the age of children does not appear to be a factor.

Airline Seat Capacity Taking a Big Hit: Among our destination's top 10 origin cities, eight are showing decreased seat capacity to Orlando's airports for April, when compared to the same month last year. Atlanta and New York City (-43%) lead the list, followed by Boston (-32%) and Detroit (-24%). As for our top origin countries, April is showing tremendous drop-offs from Brazil (-96%), Canada (-85%) and the U.K. (-79%). The situation for all domestic and international markets begins to improve in May, but those projections are subject to any developments surrounding COVID-19.

Final Month of Big TDT Collections: In February, Orange County collected more than $27 million in Tourist Development Tax, up 6.8% from the previous year and an all-time high for the month. TDT is a 6% fee levied on short-term rentals, primarily hotels. The year was off to a great start before COVID-19 disrupted the travel industry, with combined collections for the first two months up 8.3%. Unfortunately, February will be the last month of growth for some time, as March will see a dramatic drop and a full recovery likely won't happen until 2021.

NATIONAL RESEARCH

Americans Miss Traveling: According to Destination Analysts, while Americans predominantly attach fear to traveling right now, they miss it: two-thirds agree they "can't wait to get out and travel again." Unfortunately, the sense of fear is so strong that, for now, even deep discounts are not motivating Americans to commit to new trips.

Worst Year for U.S. Occupancy: For the year, national hotel occupancy is projected to be an all-time low of 38% in 2020 (down 42.6% from 2019) before climbing to 60% in 2021 (+57.3%), according to research firm STR. STR's database, which extends back to 1987, shows the worst year for occupancy was 54.6%, during the financial crisis in 2009. Average daily rate is expected to fall 13.9% in 2020 while rebounding 3.7% in 2021. Demand is projected to fall 51.2% in 2020 before rebounding  81.6% in 2021.

It's almost certain this month will again be one of the worst on record for Orlando and the global travel industry. But we recognize that when the opportunity to travel again returns, we can expect to see a significant rebound.

I'll touch base again next week with more insights and perspectives.

Until then, stay safe.

George Aguel
President & CEO