The latest weekly U.S. hotel performance data shows the high tide of summer travel season receding, but not as rapidly as it has in past years.
In the week ending July 30, the U.S. hotel industry sold 316,000 fewer room nights than it did the prior week, which traditionally has marked the annual peak for hotel demand. Between the same two weeks in 2017, 2018 and 2019, demand declined by more than 1 million room nights, according to data from STR, CoStar’s hospitality analytics firm.
Occupancy for the week was 71.9%, the fourth-highest level since the start of the pandemic but only 0.8 percentage points below the prior week, when the industry posted its highest occupancy since March 2020.
Average daily rate also inched down compared to the previous week, down 0.5% to $158, but adjusted for inflation ADR still was 3% higher than in the same week of 2019. Revenue per available room was down 1.6% week over week to $114 — up 14% from 2019, but down 1% when adjusted for inflation.
Despite the weekly decline, U.S. hotel demand for the week still was the third highest ever recorded — and only 326,000 room nights below the record set in 2019.
The decrease in weekly demand was almost evenly divided between weekdays (Monday to Wednesday) and the weekend (Friday and Saturday), which together accounted for 85% of the total loss.
Nominal ADR declined week over week, but was still the third highest ever recorded going back to 2000; and real, inflation-adjusted ADR was the 20th highest of all time.
While not as high as initially expected, summer hotel demand has been strong, ranking the fourth highest since 2000 — behind 2019, 2018 and 2017, in that order. Summer occupancy so far is 69.5% as compared to 74% in 2019. A year ago, occupancy was 68%.
Market and Chain-Scale Highlights
Top 25 market occupancy for the week reached 74%, down from 75% the previous week. Outside of the top 25, occupancy averaged 71%, which was also a percentage point lower than the week before.
Weekday occupancy in the top 25 markets remained at or above 74% for a third consecutive week, and it has been above 72% in seven of the past eight weeks. Weekend occupancy in the top 25 markets remained above 80% for a second straight week, as weekend demand increased week to week.
Top 25 market occupancy ranged from 87% in San Diego to 58% in Phoenix. Only two other markets — Houston and New Orleans — recorded occupancy below 60% for the week.
While occupancy was low, room demand in Phoenix was 2% higher than in the comparable week of 2019, but 2% lower in Houston and 5% lower in New Orleans.
Weekly hotel demand — the number of room nights sold — surpassed 2019 levels in 10 of the top 25 markets, including Atlanta, Boston, Dallas, Miami, Nashville and Orlando. Demand in Nashville was 22% higher compared to the same week in 2019.
In five markets — including New York, San Francisco, Philadelphia and Washington, D.C. — demand 10% lower than in 2019. Demand in New York fell for a second consecutive week with the decrease coming on the weekdays as weekend demand was stable.
Occupancy in Boston and Chicago reached pandemic-era highs of 86% and 80%, respectively. Chicago’s hotels got a boost from the four-day Lollapalooza music festival, hosted at the city’s Grant Park.
Group demand, which has been stable for most top 25 markets, dropped slightly in the week with the majority of the decline coming on weekdays.
Upscale and upper-midscale demand remained strong with both chain scales reporting their highest demand for week 31 of the past 22 years. Against all weeks since 2000, demand for those two chain scales was among the top 10 best.
Luxury and upper-upscale hotel demand continues to strengthen compared to 2021 but remains about 8% below 2019 levels. Midscale and economy hotel demand has weakened since the start of the year. A year ago, midscale and economy hotels were at or above 2019’s demand level, but this past week both are below those levels. The downward shift in performance began in mid-March, after which hotels in the midscale chain scale still achieved several weeks of demand levels higher than 2019 but economy hotel demand has been mostly below the 2019 benchmark.
Seven markets reported their highest nominal ADR of all time, but only two markets — Massachusetts Area and Wisconsin North — achieved record ADR when adjusted for inflation.
Looking at the summer so far, nearly all markets (135 of 166) have recorded their highest nominal ADR ever. However, adjusted for inflation, only 24 markets — including Austin, Oahu and San Diego — are at record ADR highs.
Nominal RevPAR was the second highest ever recorded and as a result, 87% of all markets achieved weekly RevPAR higher than the comparable week of 2019.
Even more surprising, 51% of markets had RevPAR above 2019 when adjusted for inflation — the highest percentage of the past four weeks.
Over the past 28 days, more than a third of all markets had real, inflation-adjusted RevPAR above 2019 levels, which is categorized as “peak.” Another 58% of markets were in “recovery,” with real RevPAR between 80% and 100% of the 2019 level. Despite the solid summer, 14 markets — including Houston, Minneapolis, San Francisco, San Jose and Washington, D.C. — were still in “recession,” with real RevPAR between 50% and 80% of the 2019 levels. San Francisco had the lowest 28-day real RevPAR comparison at 65% of the 2019 level.
Isaac Collazo is VP Analytics at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.