Deadly wildfires on Hawaii’s Maui Island, which started Aug. 8 and have killed at least 111 people and caused billions of dollars in damage, also had a noticeable impact on weekly hotel performance.
For the week ending Aug. 12, occupancy declined in two Hawaiian hotel markets, according to CoStar data. Maui, where at least two hotels are included in the destruction toll, recorded a weekly occupancy of 57.1%, down 14 percentage points from the previous week. Occupancy was also down, by 5.1 percentage points, in the Hawaii/Kauai Islands market to 76%. Compared to the same week last year, occupancy in the Maui and Hawaii/Kauai markets was down 16.7 percentage points and 6.9 percentage points, respectively.
Meanwhile, evacuations from Maui to Oahu boosted hotel occupancy in that market — up 5.7 percentage points week over week to 88.6%. Oahu’s hotel occupancy was the third highest of U.S. markets for the week.
The next weeks will be challenging for all of Hawaii as displacement and recovery efforts upend a region that is renowned for and dependent on travel and hospitality.
US Performance
The nation’s highest occupancy for the week was in Alaska at 88.9%, followed by Portland, Maine, at 88.6%.
As summer draws to a close, U.S. hotel occupancy trended down as expected, losing 0.6 percentage points from the prior week. The industry’s occupancy level of 68.3% was unchanged from a year ago but down 3.3 percentage points from the same week in 2019.
Leisure travel is expected to abate further as the new school year begins. This past week, 36% of students in kindergarten through 12th grade were back in school and well over half (64%) will be back during the week ending Aug. 19, according to STR’s 2023-24 School Break Report.
Demand for hotels is expected to continue slowing until after Labor Day and then stabilize with the start of the peak group travel season.
The latest weekly results show U.S. hotel industry revenue per available room increased 2% year over year to $107, driven by a 2.1% increase in average daily rate to $156. ADR gains have been below the rate of inflation for the past 12 weeks, but growth has improved to above 2% in the past three weeks. Real, inflation-adjusted ADR remained just under the 2019 level.
The top 25 markets continued to record stronger occupancy growth compared to the rest of the country, up 1.6 percentage points year over year to 71.7%, which was slightly higher than the previous week’s level of 71.4%.
Over the past 32 weeks, the top 25 markets have posted stronger occupancy gains than the rest of the country in all but two weeks. Compared to the same week in 2019, top 25 market occupancy was down 3.7 percentage points. Outside of the top 25, occupancy was 66.5%, down 0.8 percentage points year over year and 1.1 percentage points lower than the prior week. Compared to the same week in 2019, occupancy outside of the top 25 markets was down 3 percentage points.
RevPAR for the top 25 markets increased a healthy 5.4%, which was the second highest year-over-year gain this summer, fueled by an ADR increase of 3.1%. For the rest of the country, ADR grew 1.1%, but with the occupancy decline, RevPAR was down 0.2% among that grouping.
Besides Oahu, other top 25 markets recording occupancy above 80% were Las Vegas at 86.2%, New York at 83.6%, Los Angeles at 82.6%, Seattle at 82.5%, San Diego at 82.4% and Boston at 81.7%.
The highest RevPAR increase among the top 25 markets was in Los Angeles, up 23% driven by a 9.8-percentage-point gain in occupancy and an 8.4% increase in ADR. Taylor Swift played three of her six sold-out nights at SoFi Stadium this past week, boosting Los Angeles’ weekday (Monday-Wednesday) ADR by 15%.
Global Performance
Global occupancy excluding the U.S. rose 5.3 percentage points year over year to 73.4%, which was once again the highest post-pandemic level. ADR grew 11.4% year over year to $156, resulting in a 20% gain in RevPAR. The top 10 countries, based on supply, also achieved a post-pandemic occupancy high of 75.8%, up 6.1 percentage points year over year. ADR growth remained strong, up 7.5% year over year with RevPAR advancing 17% to $110, the second-highest level since March 2020.
Outside of the top 10, the countries with highest occupancy for the week by continent were:
- Middle East & Africa: Mauritius at 80.4%, which rose 1 percentage point year over year.
- Europe: Ireland at 91.6%, which increased 4.5 percentage points year over year.
- Asia-Pacific: Fiji at 84.4%, which rose 2.3 percentage points year over year.
- Americas: Trinidad and Tobago at 81.3%, which jumped 15.1 percentage points year over year.
Mainland China reported its highest weekly occupancy since the first week of 2019 at 78.3%. Tier one cities Beijing, Shanghai, Guangzhou and Shenzhen have posted an average year-to-date index versus 2019 of 93, whereas leisure destinations have performed better than 2019. For example, Sanya and inner Mongolia occupancy have indexed at 117 and 105, respectively. Until last month, Hong Kong and Macau had been trailing tier one cities; now they are ahead as both posted their highest occupancy since March 2020 at 84.5% and 91.6%, respectively.
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.