A three-day contemporary art festival in Miami had a significant impact on total U.S. hotel performance, the latest weekly data from CoStar shows.
According to a news release, Art Basel drew attendance of 79,000 across the three days, including public and VIP events. That topped last year’s attendance, estimated at 76,000, for the event’s 20th anniversary. Last year, the event also occurred a week earlier, and that calendar shift dragged down weekly performance in the last week of November but boosted it in the week of Dec. 3-9.
CoStar data shows the Miami hotel market contributed about half of the year-over-year growth in U.S. hotel revenue per available room for the week.
With slightly lower occupancy than in the same week last year, U.S. hotel performance was driven by higher average daily rate, as has been the case for most of 2023.
Holiday, business and convention travel also contributed to the weekly growth. Holiday travel will continue through New Year’s Eve, but business and convention travel will decline rapidly after this week.
New Year’s Eve demand for hotel rooms across the world is expected to be down slightly compared to last year due to the holiday calendar shift from Saturday to Sunday, but ADR will remain strong.
Outside of the U.S., China posted the largest RevPAR gain, continuing a 10-week trend.
US Performance
U.S. hotel occupancy reached 58.7%, up 4.5 percentage points compared to the prior week. Occupancy, however, was down less than a percentage point versus last year. Average daily rate increased 4.5% year over year, resulting in a 3.3% increase in revenue per available room.
Like in past weeks, the top 25 markets drove industry growth, with RevPAR increasing 5.8% on the back of a 6.6% ADR gain. The weekend (Friday and Saturday) produced the largest RevPAR increase of 7.8%, a reversal of the pattern for most of the fall when weekdays (Monday to Wednesday) tended to be the strongest. Top 25 weekday RevPAR grew 5.6% with shoulder days (Sunday and Thursday) up 3.5%.
In all other markets, RevPAR increased 0.8%, all on ADR, up 2.1%, as occupancy declined. Unlike for the top 25 markets, weekdays showed the largest RevPAR gain of 2.4%.
Market highlights:
- Miami RevPAR increased 67.9% year over year.
- New York City posted its second-highest RevPAR of the year. Occupancy in the city reached 89.9%, the fourth-highest level of the year.
- RevPAR for the week grew by 20% or more in three other markets: Anaheim, Boston and San Diego. All three markets posted increases in group occupancy.
Global Performance
Global hotel occupancy, excluding the U.S., moved to 66.5%, up 5.3 percentage points year over year and flat from the previous week. Occupancy is trending in line with pre-pandemic norms as 2017, 2018 and 2019 all showed a similar slowdown of occupancy from mid-November toward the end of the year.
Global hotel ADR increased 7.9% to $130 with RevPAR growing 17.3% year over year to $87. Double-digit RevPAR growth has been the norm all year long, but the magnitude is trending down and has been in the high teens for the past seven weeks. The summer led to growth in the low-to-mid 20s.
Among the top 10 countries by hotel room supply, Italy’s hotels posted a 3.7-percentage-point increase in occupancy and 3.1% higher ADR to boost RevPAR by 10.3% year over year. That’s softer performance than during the summer, when the country’s hotels enjoyed RevPAR growth of 18.1%. There was significant variation in the country with RevPAR down 31% in Tuscany but up 36.4% in Basilicata/Calabria/Puglia.
As it has for the past 10 weeks, China had the largest RevPAR gain of the top 10 countries with the measure rising 53.7%.
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.