STR: Texas, Louisiana see ‘storm surge’ in hotel occupancy after Hurricane Laura

Evacuees and emergency workers fill rooms in a temporary boost in business

Louisiana hotel occupancy rose 35.9 percent from the prior week to 55.7 percent during the week ending Aug. 29 as a result of Hurricane Laura, according to STR. Texas hotel occupancy improved 17 percent to a level of 54.4 percent with increases focused on areas closest to Louisiana.

HURRICANE LAURA LED to a demand surge for hotels in Texas and Louisiana hotels during the week ending Aug. 29, according to STR. However, the effect is higher because business was so low before the storm, and it is expected to be shorter-lived than in previous hurricanes.

Prior to Laura’s landfall, Miraj Patel, president of Wayside Investments in Houston, was preparing his properties for the impact, especially at his hotel in Galveston, Texas. However, Patel’s properties were left unscathed, and in the aftermath he is seeing his rooms filling.

“Yes, we definitely are seeing higher occupancy with evacuees and emergency workers. We have been well prepared and are following CDC guidelines to ensure safety for our guests and employees and we are blessed for the opportunity to help those in need right now,” he said. “In addition, Labor Day weekend is also showing high forecasted revenues.”

Louisiana hotel occupancy rose 35.9 percent from the prior week to 55.7 percent. Texas hotel occupancy improved 17 percent to a level of 54.4 percent.

“Different from the past natural disasters that have led to widescale evacuations, Hurricane Laura hit at a time when hotel performance is incredibly low because of the pandemic,” said Jan Freitag, STR’s senior vice president of lodging insights. “Usually with these analyses, we see demand shift geographically from the markets in the path of a storm to evacuation zones. In this case, the trend was simpler with increased hotel demand for most markets because there wasn’t a great deal of business to lose ahead of the storm.”

Each of the three markets STR define in Louisiana recorded a week-over-week jump in occupancy. Louisiana South was up 45 percent to 66.1 percent; Louisiana North was up 34.4 percent to 70 percent; and New Orleans rose 24.7 percent to 38.5 percent. Louisiana South also posted the highest increase in ADR, up 16.6 percent to $84.44.

Six Texas markets reported double-digit occupancy increases, led by San Antonio, up 38.1 percent to 59.1 percent; Austin rising 34.5 percent to 57.2 percent; and Houston up 31.2 percent to 51 percent. Among those markets that recorded an occupancy gain, Texas East posted the highest absolute occupancy level, 61 percent, which was a 17.4 percent lift from the previous week.

Houston saw the largest increase in ADR, up 11.6 percent to $79.48, followed by Austin which rose 11.6 percent to $79.48.

“We anticipate the Hurricane Laura impact on hotel performance to remain short-term,” Freitag said. “Widespread closures and a massive amount of displacements are what cause a long-term impact. Fortunately, it appears that won’t be the case with this storm.”

One Louisiana hotelier, Vimal Patel, president of Qhotels Management in LaPlace, Louisiana, was already seeing an ebb in the evacuee generated occupancy he was seeing in his hotels near New Orleans one week after Laura hit.

“Between yesterday and today, there were a lot of the utility crews who were staying have checked out of the hotels in LaPlace,” said Vimal Patel. “I think as the power utility comes up and the rooms come open in neighboring towns, people are going to start shifting closer and closer to Lake Charles.”