Hurricane impacts, calendar shifts and fall break combined to produce a solid week for the hotel industry.
Revenue per available room for the period ending Oct. 12 increased 3.8% year over year with occupancy rising 1.4 percentage points and average daily rate increasing 1.6%. Hurricanes Helene and Milton left residents in the Carolinas, Georgia and Florida in need of housing while recovery crews sought lodging. The Yom Kippur and Columbus Day/Indigenous Peoples Day calendar shifts along with fall break resulted in net positive demand.
Because of the combination of events, day-of-week RevPAR was a mixed bag with Sunday seeing a decrease (-6.2%) while Monday through Wednesday saw growth ranging from 5.1% to 6.3%. Saturday was the next strongest day, up 3%, followed by Thursday (1.8%) and Friday (0.7%). Markets in hurricane-affected zones, convention host cities and leisure destinations all experienced healthy gains.
For the week, the top 25 U.S. hotel markets saw RevPAR increase 4.1% with ADR up 2.1% and occupancy increasing by 1.5 percentage points. The best performers among the top 25 markets included New Orleans (+35.9%), which hosted the Water Environment Federation’s Technical Exhibition and Conference. Atlanta hotels grew RevPAR by 20.6% as the market hosted the NRPA convention in addition to receiving people evacuating from Florida in the wake of Hurricane Milton. Tampa and Orlando, in the path of Milton, posted hotel RevPAR declines of 9.8% and 5.3%, respectively.
RevPAR in the rest of the country rose 3.6% with hotel occupancy driving the gain up 1.7 percentage points while ADR increased 1%. Top markets included Augusta, Georgia; Macon/Warner Robins, Georgia; Florida Central North and Greenville/Spartanburg, South Carolina, all feeling the impact of increased demand from Helene and Milton and hotels filling up with displaced residents and recovery crews. Among submarkets, Anderson/Clemson, South Carolina, saw the largest RevPAR growth (92.6%) followed by Augusta CBD/North Augusta, Georgia; Augusta Area/Aiken, Georgia; and Ocala, Florida, where RevPAR increased by more than 82%.
Among the chain-scale segments of the U.S. hotel industry, RevPAR increased in a somewhat polarized fashion this week. Luxury hotel RevPAR rose 6.4%, while at the other end of the spectrum, midscale hotel RevPAR rose 6.5%, followed by the economy segment up 5.7%. The remaining chain scales were also up: upper midscale rose 5.1% and upper upscale increased 2.2%. Occupancy was the primary driver of the RevPAR gains except in upper upscale. This occupancy strength is reflective of the previously mentioned combination of events driving demand. Additionally, for only the fourth time this year, all chain scales reported weekly RevPAR growth.
Group demand soft relative to 2023
Group demand in luxury and upper-upscale hotels recovered from last week’s decline, increasing 15.2% week over week. However, demand was down 2.1% compared to the same week last year. Group demand was down in both the top 25 markets and the rest of the country. However, there were several markets that recorded strong group demand. New Orleans, Las Vegas, Phoenix, New York and Atlanta all saw double-digit occupancy increases.
Looking ahead
Results for the week ending Oct. 19 are expected to be mixed due to Columbus/Indigenous People’s Day calendar shift and ongoing impacts from the two hurricanes. Based on ForwardSTAR, demand is expected to be negative at the start of the week with growth thereafter. Taylor Swift’s Eras tour is back in the U.S. with positive impact expected over the next three weekends starting in Miami followed by New Orleans and Indianapolis.
Global RevPAR continues to grow lifted by ADR while occupancy slows
Excluding the U.S., global hotel RevPAR continued to grow, up 5% year over year. The weekly gain was driven entirely by ADR, which rose 8.5%, while occupancy declined 2.2 percentage points. Weekdays Monday to Wednesday saw the strongest growth as RevPAR increased 7% on a 12.7% ADR lift as occupancy declined.
Spain’s hotels led the way with a 21.9% RevPAR increase via ADR, which rose 18.5%. Madrid saw the largest ADR increase – surging 48.9% – along with a 3.8-percentage-point rise in occupancy, attributable to the Fruit Attraction trade fair, which drew over 100,000 attendees. Leisure markets such as the Canary and Balearic Islands also posted strong ADR growth, up 6.2% and 13.9%, respectively.
Italy’s hotel RevPAR rose 12.5% on ADR growth of 11.5%. Milan led with ADR climbing 34.8% due to the CPHI medical congress. Occupancy at 83.9% was down 1.4 percentage points. Other markets showed steady gains, with Rome's ADR up 5.8% year over year and occupancy stable, up 0.6 percentage points.
China’s RevPAR declined 20.7% following a fortnight of growth. At 55.8%, hotel occupancy was at its weakest level since early this year. Occupancy fell across all 10 of China’s largest hotel markets with Shanghai down 11.5 percentage points and Guangdong falling 2.4 percentage points. The end of Golden Week and a working Saturday were likely reasons for these declines.
Isaac Collazo is vice president of analytics at STR. Chris Klauda is senior director of market insights at STR. William Anns is a research analyst 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.