Hotels, motels, Holiday Inn…how did the Montana hospitality industry weather the storm in 2020?
For commercial real estate, some assets came out of 2020 stronger than ever before. Booming e-commerce meant industrial buildings were a hot commodity as the distribution network expanded. Self storage and medical facilities were stable throughout the year.
There was also a slow but steady resurgence of office buildings, along with retail making a rocky return.
But what happened for hospitality, one of Montana’s* most economically important industries?
Tourism generates $3.7 billion for the state and supports almost 60,000 jobs. It’s a key commercial asset to track when considering the health of Montana’s economy.
From January to November of 2020, overall hotel occupancy slipped to 52%. That’s down from an overall occupancy rate of 64% in 2019. But even with a 12% decrease, Montana fared better than much of the nation. CBRE most recently reported a 37.9% decline in occupancy in the third quarter of 2020.
Last year, the average daily rate for a room fell 14% in Montana. Across the US, the average daily rate plummeted 26%.
RevPAR is a common metric in the hospitality industry. The acronym stands for revenue per available room and can vary widely depending on the market where the measurement is taken.
In New York, an original hotbed for COVID, RevPAR fell 88%. Other densely populated areas like Boston and San Francisco had similarly steep drops of over 80%.
CBRE reports that no markets saw RevPAR growth in Q3 of 2020. But, Montana only saw a 30% drop in revenue per available room – one of the smaller drops across the nation.
Overall, Montana hospitality emerged from 2020 like many commercial assets: bearing some nasty scars, but moving in a positive trajectory. We’ll keep tracking on hospitality trends as we move through 2021. Subscribe for more on hotel developments around the state.
*Data for Western Montana market.