Finance & DevelopmentFinanceSTR: Hurricane Laura Displacements Create Hotel Demand in Louisiana and Texas

STR: Hurricane Laura Displacements Create Hotel Demand in Louisiana and Texas

HENDERSONVILLE, Tennessee—Evacuations and displacements due to Hurricane Laura created hotel demand in markets throughout Louisiana and Texas last week, according to a newly released analysis by STR.

As a result of the Category 4 storm, which made landfall in August, 24 people have died, according to a recent report from NBC News, thousands were forced to evacuate, and many remain without power.

During the week of August 23-29, 2020, Louisiana hotel occupancy rose 35.9 percent from the prior week to an absolute level of 55.7 percent. Texas hotel occupancy increased 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 STR-defined markets in Louisiana recorded a week-over-week jump in occupancy: Louisiana South (up 45 percent to 66.1 percent), Louisiana North (up 34.4 percent to 70 percent), and New Orleans (up 24.7 percent to 38.5 percent). Louisiana South posted the highest increase in average daily rate (ADR), up 16.6 percent to $84.44.

Six Texas markets reported double-digit percentage increases: San Antonio (up 38.1 percent to 59.1 percent), Austin (up 34.5 percent to 57.2 percent), and Houston (up 31.2 percent to 51 percent). Among those markets that recorded increased occupancy, Texas East posted the highest absolute occupancy level (61 percent)—up 17.4 percent from the previous week. Increases average daily rate (ADR) were less dramatic, with the largest recorded in Houston (up 11.6 percent to $79.48) and Austin (up 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.”


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