On the Friday and Saturday of Memorial Day weekend, the U.S. hotel industry sold more room nights this year than in any prior year, despite not setting a record for occupancy.
Weekend room demand was also the highest it has been all year.
Occupancy for Friday and Saturday nights reached 78%; and the record for Memorial Day weekend, set in 2016, was 81.4% occupancy, according to data from STR, CoStar’s hospitality analytics firm. The record-setting room night demand, then, is a result of increased supply. The U.S. hotel industry in 2022 has 3.2 million more available rooms than it did in 2016; and supply is up 1.1 million available rooms from 2019.
For the week leading up to Memorial Day, U.S. hotel occupancy was 66.5% — down from 68.6% the previous week. The 2-percentage point week-over-week occupancy decline was the largest on record for the holiday period. Record occupancy for the pre-Memorial Day week was set in 2015 at 71.3%, which was nearly matched in 2019 at 71%.
Supply also is a factor in these comparisons, of course.
Actual room demand — the number of room nights sold — was the third highest of any pre-Memorial Day weeks, just below 2018 and 950,000 less than in 2019. Additionally, room demand was the eighth highest since the start of the pandemic, and second best of the year.
Weekly U.S. hotel occupancy has been above 66% six times this year, compared to seven times during the entirety of 2021. None of those weeks in 2021 happened before the Memorial Day holiday.
Average daily rate for the week was down only 0.1% from the previous week, but due to the lower occupancy, revenue per available room declined by 3% week over week.
ADR remained well above the pre-pandemic level, rising to a 22% premium over 2019. It should be noted that this week compared to 2019 is somewhat non-comparable as the Memorial Day holiday was a week earlier in 2019. Accounting for the holiday shift, this year’s ADR was 13% higher than in pre-Memorial Day week of 2019. On an inflation-adjusted basis and accounting for the holiday shift, real ADR was equal to 2019.
At $152, weekly ADR was the fourth highest since March 2020. Adjusted for inflation, it was the seventh best since the start of the pandemic. Weekend ADR was $174, the second highest of the pandemic era. As compared to 2019 Memorial Day weekend, this year’s real ADR was 11% higher.
Weekly RevPAR was $101 — the fourth best since the start of the pandemic, but down 7% compared to the pre-holiday week in 2019, when accounting for the holiday shift.
Accounting for inflation and the holiday shift, 40% of the 166 STR-defined markets were at “peak” RevPAR, or higher than 2019. Another 51% of markets were in “recovery,” with RevPAR between 80% and 100% of 2019 levels. Over the past 28 days, which incorporates the same four weeks and accounts for the holiday shift, 83% of markets were at “peak” RevPAR. Real RevPAR on a 28-day basis has 54% of markets at “peak” and an additional 42% in “recovery.” Adjusted for inflation, Memorial Day weekend RevPAR was 9% higher than it was in 2019.
Market Highlights
In the top 25 largest U.S. hotel markets, weekly occupancy remained above 70% for the third consecutive week, despite a decline from the previous week.
The Boston and Chicago hotel markets both reported their highest weekly occupancy of the pandemic era at 80.2% and 72.1%, respectively. Both markets also set pandemic-era records for weekday occupancy.
Central business districts maintained weekly occupancy above 70% for a third week straight. This week’s central business district occupancy (70.4%) was the fourth highest of the pandemic era. Weekday occupancy slipped below 70% for the first time in five weeks with this week’s result the fifth highest since the start of the pandemic. Hotels in the New York Financial District had the highest weekday occupancy of the central business districts at 91%, followed by the Dallas central business district at 85%.
For a third consecutive week, New York City led the nation with the highest weekly occupancy at 82.8%, which is its second highest of the pandemic era just behind the prior week. Hawaii/Kauai and Boston were the only other markets with weekly occupancy above 80%. The highest weekday occupancy was also achieved in New York at 84.3% — the only market with weekday occupancy above 80%. Weekend occupancy was led by Boston at 92.5%, with Rhode Island and Sarasota, Florida, also reporting weekend occupancy above 90%. In total, 61 of the 166 STR-defined markets reported weekend occupancy above 80%.
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.