Cleveland-area hotels continue to recover, but occupancy still lags pre-pandemic levels

CLEVELAND, Ohio – Hotels in Greater Cleveland continue to recover from the downturn caused by the pandemic, although occupancy still lags compared to 2019.

Travel data researcher STR this month released national and regional data tracking the hotel industry’s ongoing recovery from the pandemic.

There is some good news in the numbers: Hotels in Cleveland and throughout Ohio are recovering at a rate that’s slightly better than the national average, at least by one important metric. Occupancy – which measures the percentage of hotel rooms that are full – was 58.4% in the six-county Greater Cleveland region last year, up from 52% in 2021, but still down from 61.3% in 2019.

Across Ohio, hotel occupancy in 2022 was 58.2%, up from 53% in 2021, but down from 61.2% in 2019.

Nationwide, hotel occupancy was 62.7% in 2022, up from 58% in 2021, but down from 66.4% in 2019.

There is some less good news, too: Downtown Cleveland hotels are taking the longest to recover, as business travel has been the slowest to return to pre-pandemic levels. Occupancy at downtown Cleveland hotels is 57% in 2022, up from 48% in 2021, but significantly below 68.1% in 2019.

Joe Savarise, president and CEO of the Ohio Hotel and Lodging Association, said the numbers paint an inconsistent, slow recovery for the industry.

“I don’t think anybody would say they’re happy where they are yet,” said Savarise. “We’re recovering. That recovery is not complete.”

Laurel Keller, executive vice president of Newmark Valuation & Advisory, said Cleveland’s hotel recovery is being fueled in large part by leisure travel.

“Over the past two years, the Cleveland area’s leisure travel – boosted by signature events like the NFL Draft in April 2021 and the NBA All-Star events in February 2022 – contributed most significantly to room night demand increasing,” she said. “Group-related demand increases have followed behind leisure, and corporate-oriented travel recovery has been steady, though slow.”

Savarise said he didn’t see full recovery for the hotel industry until more people returned to work. “We have to be advocates and champions of returning this economy back to work,” he said. “For the economy to work, people need to get back to work — in offices, traveling for business, going to conferences and events.”

He noted that even when hotels return to pre-pandemic occupancy levels, the industry will have missed out on years of growth.

“Even when we’re back to 2019 numbers, we’ll be behind,” he said. “We’re forfeiting four years of growth.”

Another industry metric – the average rate charged by hotels in a community – offers a similarly nuanced view of the industry’s recovery.

The average daily rate of a hotel room in Greater Cleveland increased in 2022, above both 2021 and 2019 levels. In 2022, the average hotel stay in the six-county Cleveland region costs $120.26 per night, up from $107.16 in 2019; downtown rates increased even more, from $154.77 in 2019 to $178.65 in 2022.

Those rates are increasing, however, may not be keeping pace with the rising costs that hotels across the state and the nation are facing, said Savarise.

“Costs are going through the roof – from labor to provisions to equipment to energy. You name it,” said Savarise.

David Sangree, president of Hotel & Leisure Advisors in Lakewood, said he expects many markets will return to pre-pandemic occupancy levels this year. “It may take a year longer for downtown,” he said.

Southern and leisure-oriented cities, meanwhile, continue to recover faster than Cleveland and other Northern cities.

Keller said she expects that trend to continue. “The past two years saw a sharp uptick in blended-purpose travel, specifically leisure and business, primarily in popular vacation destinations,” she said. “We anticipate these travel behavior patterns to continue as long as companies utilize remote or hybrid working models.”

2022 hotel occupancy totals in the largest US markets

Oahu Island, Hawaii, 75.4%

New York City, 74.8%

Orlando, 72.8%

San Diego, 72.6%

Miami, 72.1%

Tampa, 71.6%

Orange County, California, 71.3%,

Los Angeles, 71%

Phoenix, 68.7%

Nashville, 68.6%

Denver, 68.1%

Boston, 67.2%

Seattle, 66.5%

Dallas, 65.3%

Atlanta, 64.9%

San Francisco, 64%

Norfolk/Virginia Beach, 62.9%

Washington, DC, 61.7%

New Orleans, 61.4%

Chicago, 61.2%

Philadelphia, 60%

Cincinnati, 59.9%

Columbus, 58.6%

Detroit, 58.5%

Cleveland, 58.4%

St. Louis, 58.3%

Houston, 57.6%

Minneapolis, 55.5%

Source: STR

Read more: Hotel occupancy in Cleveland improves in 2021, lags behind national average