Hurricane Increases Hotel Demand in Louisiana, Texas Markets

Map with hotel demand impact for Hurricane Laura
Hurricane Increases Hotel Demand in Louisiana, Texas Markets

Evacuations and displacements due to Hurricane Laura created hotel demand in markets throughout Louisiana and Texas last week, according to an analysis by STR.

During the week of 23-29 August, Louisiana hotel occupancy rose 35.9% from the prior week to an absolute level of 55.7%. Texas hotel occupancy improved 17.0% to a level of 54.4%.

“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 SVP 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.”

Source: STR, © 2020 CoStar Realty Information, Inc.

Each of the three STR-defined markets in Louisiana recorded a week-over-week jump in occupancy: Louisiana South (+45.0% to 66.1%), Louisiana North (+34.4% to 70.0%) and New Orleans (+24.7% to 38.5%). Louisiana South posted the highest increase in average daily rate (ADR), up 16.6% to US$84.44.

Six Texas markets reported double-digit percentage increases, led by San Antonio (+38.1% to 59.1%), Austin (+34.5% to 57.2%) and Houston (+31.2% to 51.0%). Among those markets that recorded an occupancy gain, Texas East posted the highest absolute occupancy level (61.0%), which was a 17.4% lift from the previous week. Gains in average daily rate (ADR) were less dramatic, with the largest coming in Houston (+11.6% to $79.48) and Austin (+11.6% 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.”

STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.