Hotel occupancy is typically measured by the consistent supply of rooms, and on the surface recent numbers have been looking more favorable despite the continuing COVID-19 pandemic, with occupancy finally eclipsing 50%. Occupancy rates were 50.2% in the week ended Aug. 15, up from 49.9% a week earlier, and 46.2% a month earlier.
But given that the pandemic has forced closures of many U.S. hotels, and that reported occupancy rates factor in those closures, occupancy rates are not providing the full picture of distress in the industry. Meanwhile, unless hotels are given additional financial relief, more closures will ensue, artificially inflating occupancy and making it an even less reliable metric.
Total room inventory
The hospitality data firm STR has created a new data point, total-room-inventory methodology, or TRI, to factor in the temporary hotel closures. Until all temporarily closed properties have reopened, TRI will lag occupancy. That is because room supply, its denominator, is greater than room bookings, its numerator.