Hotels are experiencing a bit of an early spring, as U.S. hotel industry occupancy reached a 20-week high.
While many U.S. students in kindergarten through 12th grade are on spring break, another surge will occur in mid-April, according to the latest School Break Report from STR, CoStar’s hospitality analytics firm.
A year ago, spring occupancy peaked at 59.5% during the week of April 4-10. Over the past four weeks, occupancy has averaged 11 points higher than a year ago.
Still, the change in seasons is evident in STR’s U.S. hotel performance data for the week of March 6-12, when occupancy across all markets averaged 63.2%, driven by robust leisure demand but also a pickup in weekday bookings, which indicates a rise in business travel.
Weekday — Monday to Wednesday — hotel occupancy was at its highest level since Aug. 21, 2021.
A more important sign of business travel ramping up is weekday hotel occupancy in the central business districts of the top 25 U.S. markets, which hit a pandemic-era high of 57.9%.
Group demand also reached a pandemic-era high with luxury and upper-upscale hotels selling 1.6 million rooms during the week, which was 81% of what those hotels sold at this time in 2019.
Weekday group demand was also the highest since early March 2020.
On average over the past six weeks, weekday group hotel demand has been 59% of what it was in 2019, while on shoulder days — Sunday and Thursday — it has been 66% of the 2019 level.
Weekend group demand — often from social groups and weddings — has performed the best and is the closest to reaching recovery at 77% of 2019’s volume. Top 25 market group demand is also on the rise, reaching pandemic-era highs on both weekdays and shoulder days.
Average daily rate also blossomed, reaching the second-highest nominal level ever at $144.68, behind the all-time high recorded during the 2021 Christmas holiday week.
Weekly ADR increased 4.7%, led by 5.4% growth on the weekend.
Hotels in the top 25 markets reported a 5% gain in weekly ADR, evenly distributed between weekdays and the weekend. Compared with the same week in 2019, the week’s ADR was 8% higher. ADR has now been outpacing 2019 levels for the past five weeks. Adjusting for inflation, weekly ADR was 4% lower than in 2019.
Revenue per available room followed, increasing 8.3% week over week.
Weekly RevPAR was $91.45, a 30-week high and 97% of the 2019 comparable. On an inflation-adjusted basis, RevPAR was 13% lower than in 2019, but both the nominal and real levels remained in STR’s “recovery” category as RevPAR was between 80% and 100% of 2019 levels.
Even though RevPAR showed solid gains, the number of markets at “peak” performance, with RevPAR exceeding 2019 levels, fell from 100 to 90 this past week. On a 28-day moving total basis, 61% of the 166 STR-defined markets were at “peak” RevPAR, which is the most of the past eight weeks. Another 30% were in “recovery.”
Market Highlights
Florida’s hotels led the nation with 81.6% occupancy, followed by Arizona at 79.1%, which was its highest occupancy since the start of the pandemic and its fifth-highest weekly level dating back to 2019.
Florida’s occupancy level was its second best of the pandemic era; the previous high watermark was two weeks prior. Of the top 10 highest occupancy markets in the U.S., nine were in Florida led by the Florida Keys at 89.5%. Orlando, while not in the top 10 during the week, has sold more than 2.3 million rooms over the past three weeks, the most for a three-week period in the market since late February/early March of 2020.
Salt Lake City’s hotel market, which has been in the top 10 for occupancy for two weeks, reported 84.6% occupancy, its highest occupancy since the start of the pandemic.
The Dallas hotel market also set a pandemic-era high with 70.2% occupancy for the week.
Overall, 35 of the 166 STR-defined U.S. markets reported occupancy higher than 70% this week, the most since mid-October 2021.
New York City weekly hotel occupancy reached 67.7%, which was the market’s highest since the Christmas holidays and 10th best since the start of the pandemic. Weekend occupancy soared to 77.4% after being below 70% since the start of the year. All New York submarkets reported occupancy above 70% over the weekend except Midtown East, at 67.2%. ADR for the city rose 7% from the week prior and by 9% over the weekend.
Eighteen U.S. submarkets reported their highest occupancy since the start of the pandemic — several of them in airport locations, which likely benefited from weather disruptions over the weekend. Overall, hotel occupancy topped 70% in more than a quarter of submarkets.
Twelve markets reported their highest ADR since the start of the pandemic including Tampa, Jacksonville, Salt Lake City, Phoenix, Savannah, San Antonio and Memphis.
The highest ADR in the country was in the Florida Keys at $592, followed by Maui at $575. Maui hotel rates have surpassed $500 for the past 12 weeks, while hotels in the Florida Keys have been at that level since the beginning of the year. Weekend ADR in both those markets was above $600. The number of hotels with an ADR above $1,000 remained elevated compared to 2019. Overall, 79 hotels were at or above that level, compared to 65 in the previous week.
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.