The latest weekly data from CoStar hospitality analytics firm STR shows U.S. hotel industry occupancy plateaued at 65.1%, basically matching the level achieved the week prior. But while average occupancy did not change, day-of-week dynamics tell a tale of two opposite forces.
Travelers opted to stay home for Mother’s Day, putting a damper on weekend occupancy, which was down 4.7 percentage points week over week. Weekday occupancy, on the other hand, improved 2.4 percentage points — a sign of increased business travel and weekday leisure travel.
Compared to last year, occupancy showed a modest decline of 1.4 percentage points, impacted partially by a calendar shift, with Mother’s Day 2022 occurring one week earlier.
Average daily rate at $155 was $2.70 lower than the prior week and a 3.4% increase year over year. The increase was just behind the most recent CPI-indexed annual inflation rate of 5%.
With slightly weaker ADR, revenue per available room fell $1.90 week over week to $101.
Comparing the past four weeks to the matching period last year, all indicators were positive with occupancy up 0.4 percentage points, ADR up 4.9% and RevPAR up 5.4%. This points to a possible repeat of the “summer of summers” experienced last year as the Memorial Day holiday and the unofficial kickoff to summer travel season is just weeks away.
Top 25 Markets
The U.S. top 25 markets finished the week at 70.6% occupancy, down slightly from a week prior. Markets outside of the top 25 held steady week over week at 62.1%. ADR in the top 25 markets declined 2.3% week over week to $187 while all other markets experienced a smaller decline, down 1.1% to $136.
Monday through Wednesday occupancy for the top 25 markets increased 2.3 percentage points week over week to 72.6%, while Friday through Saturday occupancy declined 2.7 percentage points to 76%.
The top market performer once again owes thanks to the Taylor Swift stadium tour as Philadelphia, hosting the star over the weekend, posted the top 25’s largest week-over-week increases in occupancy — up 8.8 percentage points — ADR (+27.1%) and RevPAR (+44.5%). Philadelphia weekend occupancy and ADR were 89.1% and $253, respectively, not quite as high as the previous week in Nashville, Tennessee. Music City posted weekend occupancy and ADR of 94.2% and $318, respectively. The Taylor Swift tour moves to Boston followed by East Rutherford, New Jersey, and Chicago.
Washington, D.C., and Denver were the next two top performers with week-over-week RevPAR increasing 19.4% and 14%, respectively. New York City continued to hold the top occupancy, ADR and RevPAR positions among the top 25.
Segmentation
Group bookings at luxury and upper-upscale hotels dropped 9.4% week over week as the spring convention season slows. Group bookings essentially matched last year’s levels. Transient bookings at luxury and upper-upscale hotels increased 5.1% from the prior week and were 3.6% above last year’s levels.
- Fifteen of the top 25 markets experienced a week-over-week increase in transient bookings, while on the group side, 16 experienced a decrease in group bookings week over week.
- The strongest group markets week over week were Detroit, Las Vegas and Washington, D.C.
- The strongest transient markets week over week were Denver, Minneapolis and Philadelphia.
Global Performance
The gap between 2022 and 2023 global occupancy, excluding the U.S., has been closing as the effects of the last major wave of COVID-19 receded this time last year. The occupancy difference between this year and last year sits comfortably in the single digits, up 8.5 percentage points this week. Weekly ADR came in 17.8% higher year over year at $137, decreasing slightly from the previous week by 7.4%. Resulting RevPAR for week was $92.
Hotel performance in China continues to improve with occupancy up 23.3 percentage points year over year following a 19.9-percentage-point gain the week before.
Performance data for Germany points to great improvements in the past couple of months with this most recent week producing the second highest occupancy of the top 10 countries at 76.5%.
France’s hotels saw a small decline in occupancy compared to the same week last year, down 2 percentage points. This in part could be attributed to the school holidays. Strikes across at the country have shown only limited impact on performance.
The United Arab Emirates continued to outperform all top 10 countries with occupancy at 81.8%, however, now past Ramadan and Eid al-Fitr comparisons, there is evidence of some rate growth slowdown. ADR was $167.68, down 12.6% from the comparable week last year.
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.