Finance & DevelopmentHotStats: Shutdown Resulted in 88.8 Percent YOY Drop in GOPPAR for D.C....

HotStats: Shutdown Resulted in 88.8 Percent YOY Drop in GOPPAR for D.C. Hotels

The 35-day federal government shutdown from December 22nd, 2018, to January 25th, 2019, dealt a crushing blow to profitability for Washington, D.C. hotels, according to a recent report from HotStats. Hotels in the nation’s capital recorded an 88.8 percent year-on-year drop in GOPPAR during the month of January.

Several factors prompted the decline, including the closure of the Smithsonian museums, the National Zoo, and the National Gallery of Art. These, combined with delays at Reagan National Airport and Dulles International Airport, culminated in an occupancy drop of 4 percentage points to 54.5 percent, compared to the same period the previous year.

In addition to decreased occupancy, the market reported a consistent decline across all revenue centers. TRevPAR experienced the negative effects of this demand contraction, with a YOY 4.9 percent fall 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 YOY drop of 4.9 percent in RevPAR to $104.17.

Not only did the shutdown produce city closures, but it also precipitated the cancellation of events, such as the 2019 S&T Cybersecurity and Innovation showcase and the 2019 AGA Financial Systems Summits—both moved from January to March. This took a toll on all departments, especially food and beverage through conference and banqueting, with a 17.7 percent YOY plunge in room hire revenue per square foot. The results for that same period of food RevPAR (down 3.9 percent) and beverage RevPAR (down 15 percent) also contributed to the 6.9 percent fall in total F&B RevPAR to $48.71, according to HotStats.

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