Hospitality - How is ADR and RevPAR holding up in your area?
I don't have any hotels in my portfolio, but I'm curious how ADR and RevPAR are doing. 

Back around April or so I read an article that suggested if hotels will hold firm on ADR, there would be a faster recovery. The theory is that if you aren't discounting rate, occupancy will recover and you'll be back to normal once COVID retreats. 

However if you start cutting rates to try and boost occupancy, it'll be harder to push ADR back up once things get back to normal.
[{"id": "g4jswq0", "text": "I pretty much only cover hospitality, and the strategy you described is pretty much spot on. From what I've seen across the top 25 submarkets of the end of July, YTD Occupancy was hovering around 45% compared to 80% for the same period last year. ADR is around $175 compared to $220 ish last year. So you're seeing a 45% decline in occupancy vs a 20% ish decline in ADR. The slippage in ADR is really driven by competition in the market, particularly submarkets where they have been a lot of supply growth over the past few years and it's getting more cutthroat now the demand has dried up.", "replies": [{"id": "g4ju09l", "text": "So that would be roughly a 55% reduction in revpar YoY\n\nPrevious revpar = $176\n\nCurrent revpar = $79\n\n\nDamn.", "replies": [{"id": "g4ju6j9", "text": "Exactly - lol it's a pretty brutal sector to be in right now.", "replies": [{"id": "g4k16et", "text": "Do you see biz travel ever returning to 2019 levels?", "replies": [{"id": "g4ltkdt", "text": "Experts are saying 2023-2025 or so, quicker for limited/select service and longer for group/meeting/full service hotels", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "g4jut9d", "text": "The data your referencing is going to be all primary markets, correct? Any insight or surprises in secondary and tertiary? I could see smaller markets faring better with a flight from densely populated metros", "replies": [{"id": "g4jxogc", "text": "Look at STR, they have some pretty great reporting. Essentially limited service in \u201cdrive to\u201d markets has faired much better, relatively. Full service urban is shuttering.", "replies": [], "depth": 3}, {"id": "g4k2vf1", "text": "Yeah, that just covers the top 25 submarkets. I cover a few regional markets and drive to leisure destinations and some, particularly resorts in coastal areas are actually beating their performance from last year. Leisure has been stronger than expected throughout the summer, but with schools sort of returning winter, it is expected to be extremely challenging for most properties. \n\nIn general, any hotel or market that attracted significant corporate, convention, conference, or general group business has been badly impacted, and those types of properties make up a lot of the major rooms supply in many secondary and tertiary MSAs.", "replies": [], "depth": 3}], "depth": 2}, {"id": "g4l2dzj", "text": "When all of this really started to hit hard in March/April, I thought I read that most hospitality\u2019s breakeven point is around 30% occupancy. Is there any truth to that?", "replies": [{"id": "g4l71wr", "text": "Generally between 30% - 40% is the right ballpark, but it really depends on the hotel, its fixed expenses (ground lease, taxes, insurance, etc), and the management teams ability to control their variable expense.  If it's union that adds another massive level of complexity. The entire labor and expense model really changes at different occupancies, as you turn off certain services and amenities. Many hotels have been running with a skeleton crew since March and a lot of their core functions (housekeeping, F&amp;B, maintenance, sales &amp; marketing, etc) have been scaled back or had their operational frequency reduced.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4kb9wi", "text": "I'm working on an extremely off market brand new renovation piece out in Chicago. Revpar was 219 this time last year. Its about 150ish now.\n\n&amp;#x200B;\n\nMore on the deal. Originally we were asking $26m with 10 eb5 visas about 8 months ago. Today, we can do a deal between $8.5m-9m with no eb5. They spent 11m into the PIP. But now they're in receivership.", "replies": [{"id": "g4lttiu", "text": "I have people who could do this deal. Lmk", "replies": [{"id": "g4ltvb3", "text": "Dm me. Let\u2019s get something", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4kfqi7", "text": "I\u2019m in Texas. A property owner closed down an entire building and moved guests to his adjacent property. The 2nd building was at 50% average, that says something in the hottest Texas market", "replies": [], "depth": 1}, {"id": "g4l3i69", "text": "Hospitality folks-\n\nWhat is your advise for someone not in this industry?  I see great assets all over and wonder how they are doing.  I was working on a jv with office/multi/hotel where the gp was a hotel operator that kind of went cold (they control the site) (pre covid) where we wanted to do the multi.  \n\nWhat do you all need?  What can non hotel folks bring to the table that really helps and gets deals done?  Do you need operating capital (I feel like you don't) or is this a wake up call to mitigate risk into more mixed use?  \n\nIf I own say 5 or 6 hotels what is it that I wake up hoping I can solve every day problem wise?  What keeps me up at night?  \n\nWhat are the win wins here (hate to be so cliche).  Multifamily is so hit and office has a giant question mark over it.  Just wondering if I am overlooking hospitality, it is so much more insular than other asset classes.", "replies": [{"id": "g4l6nxp", "text": "I don\u2019t know if there are big voids to fill. Almost every hotel with debt on it (vast majority) received some type of forebearance or rework of loan terms. The big question is whether those will be extended or if we will see more deals pushed to receivership and eventually forced transactions. The fact of the matter is there is a huge amount of in-industry capital ready to pounce.  I\u2019ve lost count the amount of times someone has asked me if I know anyone looking for additional equity or wants out of a deal but so far it\u2019s been minimal. The big hope if your in the opportunity side is whether things accelerate in the next few months", "replies": [{"id": "g4lawp7", "text": "Thanks.  That is kind of what I figured.  \n\nWe'd def be opportunity side.  No one I work with is sitting around like \"oh man I'd love to get into hotels\" we just want to make money.  \n\nEverytime I talk to hotel folks the impression I get (which you confirmed and I say this with a sense of humor) is:\n\nhttps://imgur.com/a/f8Mmpfv", "replies": [{"id": "g4lhnnj", "text": "Yeah that\u2019s an accurate statement. Oddly enough I believe the best deal in hospitality is probably new build in the right markets.  Probably able to get into land a little cheaper, most municipalities are probably being a little more accommodating, soft costs are going to be at least 10-15% lower than last year and if you can hit the construction pricing while before things ramp up your going to get another 10% on hard costs probably. All that said it\u2019s a 24 month commitment not counting any entitlement work, but you\u2019ll be long past covid, hopefully into a recovery and with a great basis. Just my two cents.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4l5xhv", "text": "Not only that, when you are boosting occupancy, you're boosting labor expenses and wear on the building,  too.  More beds to turn and prepare.  I'd rather have a higher rate and lower occupancy. \n\nOur extended stay hotels are doing better than the rest.  Currently, our hotels are between 38% - 40% occupancy and YTD they are closer to 25% on average.  ADRs are a bit lower than we would like but only down about 8% or so.", "replies": [], "depth": 1}, {"id": "g4ls5g3", "text": "Occupancy in my city is at 12.5%, ADR and RevPAR don\u2019t really matter when things are this bleak.  Local officials are predicting a 4 year recovery to get back to pre COVID numbers.", "replies": [], "depth": 1}, {"id": "g4m40zp", "text": "Was just talking to an STR employee who shared similar thoughts already expressed in the comments. At least for this year, he suggested that post Labor Day, you\u2019re doing to see a drop in Leisure demand, but there\u2019s virtually no business demand to really help supplement that. Group demand is literally 0.", "replies": [], "depth": 1}]