NOT THAT ANYONE is surprised, but the 35-day shutdown of the federal government in December was not good for hotels in Washington, D.C. The extent of the damage is laid out in a report from HotStats.com.
The new report showed that during the shutdown, from Dec. 22 to Jan. 25, gross operating profits per available room for the D.C. market during the entire month of January dropped 88.8 percent from the previous year. The closing of popular tourist attractions that are run by the federal government, such as the Smithsonian museums, National Zoo and the National Gallery of Art, along with delays at Reagan National Airport and Dulles International Airport, brought occupancy down 4 percentage points to 54.5 percent.
TRevPAR for the city’s hotels fell 4.9 percent to $161.95. The 2 percent increase in average room rate over that period, to $191.02, was not enough to offset declining occupancy, leading to a 4.9 percent dip in RevPAR to $104.17. The cancellation of some events hit the hotels’ F&B departments, leading to a 17.7-percent plunge in room hire revenue per square foot and a 6.9 percent drop in total F&B RevPAR to $48.71.
This slump came as the rest of the nation saw a 2.4 percent increase in profits per room in January despite the shutdown. There was some compensation in that labor costs per available room in D.C. fell 3.7 percent in January while they rose 3.9 percent for the rest of the country.
“The federal shutdown serves as a cautionary tale for the hotel industry, which is adversely impacted in the aftermath of black swan events, such as this. The shutdown will not be the last jolt, but what it illustrated is the hospitality industry’s ability to persevere in the face of adversity,” HotStats says in its report. “Hoteliers will have to remain vigilant, because knowing when the next one will strike, is one thing that is hard-pressed to predict.”