IN THE PECULIAR give and take that hotels experience from major storms, Hurricane Florence brought the highest number of closings, and the highest spikes in occupancy, to properties in North Carolina, according to STR. Neighboring states South Carolina and Virginia saw overall decreases in performance.
In North Carolina, 65 hotels containing 4,422 rooms were closed due to storm damage as of Oct. 3. About half of them already have re-openings planned for later this month and November. The community of Coastal Carolina, North Carolina, which makes up 21.6 percent of submarket supply, had the most closings with 24 hotels and 1,406 rooms. Wilmington, North Carolina, with 20.3 percent of the area’s supply, had the second highest number of closings, 21 hotels with 1,642 rooms.
Only three properties in South Carolina, all in the Myrtle Beach area, closed due to Florence, taking 323 rooms off the market.
With the closings, North Carolina also saw occupancy rise 16.5 percent over the same time last year for the week of Sept. 16 to 22. During that same week, occupancy levels in South Carolina and Virginia dropped 6.1 percent and 5.0 percent respectively. Rural areas around Raleigh, North Carolina, saw the highest occupancy, 90.2 percent, which was the highest increase as well, up 71.5 percent. ADR for the area was $87.77, a 17.4 percent increase.
Mount Pleasant and Isle of Palms, South Carolina, saw the lowest occupancy, 44.8 percent, which was down 29.3 percent from the previous year. ADR for the area stood at $130.92, down 9.8 percent.
“Hurricane-affected areas usually see a similar pattern when it comes to hotel performance — a demand decline prior to a storm’s arrival and a demand spike once the storm dissipates or moves on,” said STR consultant Hannah Smith. “With Hurricane Florence specifically, that trend was most visible in North Carolina, likely from the combination of fewer hotels operating and more demand from displaced residents and emergency workers. On the other hand, performance decreases were more common in South Carolina and Virginia, supporting the idea that disasters such as these can negatively affect performance in less strongly affected areas.”
In April, STR said the first quarter of 2018 saw record performance by the U.S. hotel industry due in part to a one-time boost from hurricanes Harvey and Irma. STR noted the effects of that stimulus are lessening with little a slowdown in growth.