The third week of October was a good week for U.S. hotels with a variety of demand drivers boosting performance.
In the week ending Oct. 19, U.S. hotel revenue per available room increased 4.2% on 2.5% growth in average daily rate and a 1.1 percentage-point increase in occupancy. RevPAR growth in the top 25 U.S. hotel markets trailed slightly versus the remaining markets, which saw ongoing demand and ADR gains from areas affected by Hurricane Helene and Hurricane Milton. Additionally, Taylor Swift’s tour stop and the Adobe MAX conference helped Miami drive 0.4 percentage points of the national RevPAR gain. And for a second consecutive week, all chain scales posted weekly RevPAR growth.
Northeastern hotels lead nation
Hotels in the Northeast U.S. reported the largest RevPAR increase among the regions, up 12.9% on a strong ADR lift (+7.6%). Double-digit ADR increases were seen across the region, led by Rhode Island, which grew ADR by 20%.
New York City hotels reported an ADR increase of 10.9% with RevPAR rising 16.6%. Occupancy in the city reached 93.7%, which was its highest level since 2019. New York also had the nation’s highest weekly occupancy for a second consecutive week and has been the occupancy leader in six of the past eight weeks. NYC hotel ADR reached $414 and was second only to Maui ($475).
Hotel RevPAR growth in the Midwest and South was nearly identical (~6.5%) with ADR edging out occupancy growth in both regions. Wisconsin North led the Midwest in RevPAR gains (+38.6%) on a 25.1% increase in ADR. Minneapolis and Chicago were not far behind with RevPAR growth above 17%. Chicago’s surge also came from ADR, whereas Minneapolis was led by occupancy.
In the South, hotel markets affected by recent hurricanes continued to see growth tied to displacement demand. In the most recent week, Augusta, Georgia, reported the nation’s largest RevPAR increase (+75.5%) on double-digit occupancy and ADR gains. Knoxville, Tennessee; Sarasota, Florida; Greenville/Spartanburg, South Carolina; and Florida Central North followed with RevPAR gains above 42%. These five markets added 0.5 percentage points of RevPAR growth to the industry. If you exclude the five aforementioned markets along with Florida Central South, Tampa, and Miami – the latter due to Taylor Swift and the Adobe MAX conference – U.S. hotel RevPAR growth was 3% versus the reported 4.2% increase. North Carolina West, which includes Asheville – one of the hardest-hit areas from Hurricane Helene – saw RevPAR fall 16.1% due to a retreat in ADR.
Western region hotels saw weekly hotel RevPAR decrease 4.1% due to sharp declines in Anaheim, California; Denver; Albuquerque; Las Vegas and Maui. The best performing market in the region was Salt Lake City, which saw RevPAR increase 15.9%. San Francisco’s RevPAR was up 5%, all on occupancy growth as ADR decreased. Occupancy reached 75.7% in San Francisco.
In total, shoulder days Sunday and Thursday and the weekend days Friday and Saturday drove national RevPAR growth as the weekday level from Monday to Wednesday was flat. At 6.6%, the weekend RevPAR increase was the largest of the past 28 weeks.
Group demand stumbles
For a second consecutive week, group demand among luxury and upper-upscale hotels decreased versus the same week last year. In this most recent week, group demand was down 2.2%, which was only slightly better than the prior week’s decrease (-2.3%). Unlike last week, group demand was below the level seen in 2019. Group ADR did better than demand, rising by 2.6% versus the 2% gain seen a week earlier.
Of course, there were winners. In the top 25 markets, New York City, San Francisco, and Miami hotels saw a sharp increase in group demand (23%+). Detroit, Houston and Los Angeles also reported double-digit gains. Overall, Tampa led in group demand growth (+74.5%), which is likely related to the hurricane rebuilding efforts.
All hotel types see second week of growth
Luxury hotels led the nation with RevPAR growth of 11% on a 7.7% ADR increase. Like with the national total, the weekend gain was much higher (+17%) than the weekday (+4.6%). It comes as no surprise that Miami – with three nights of Taylor Swift and the Adobe Max conference – saw the largest increase of luxury hotel RevPAR (+62.4%) with neighboring Fort Lauderdale up 57.9% both from ADR increases, up 46.2% and 56%, respectively.
Also joining the party was Minneapolis, where luxury hotels posted a 57.6% increase. However, the market’s ADR was just less than one-third of what the other two cities reported, which was north of $600. Weekend ADR in Miami and Fort Lauderdale topped $850 but that wasn’t the highest in the nation. That honor went to Austin’s luxury hotels, which saw ADR at $1,306 due to the Texas/Georgia football game and F1 racing.
Among the remining chain scales, midscale hotels had the next highest RevPAR growth (+4.9%) with its gains coming from hurricane-affected markets, including Augusta (+144%), Sarasota (+97.1%), Tampa (+56.3%), Greenville/Spartanburg (+54.7%) and several others.
Upper-midscale, economy, and upscale chains saw RevPAR increase by more than 3.5% with upper-upscale brands the laggard among branded hotels, up 2.8%. However, there were two standout markets for upper-upscale hotels: Knoxville (+124.8%) and Sarasota (+46.2%). Knoxville benefited from hurricane-affected business but also from the Tennessee versus Alabama football game, as weekend RevPAR grew by more than 400%. Shoulder and weekday periods also saw exceptional RevPAR gains.
What’s next for US hotels
Taylor Swift will continue to help the U.S. hotel industry with stops in New Orleans and Indianapolis before heading north to Canada. Looking ahead, we foresee a solid October based on Forward STAR data up until Halloween week. It is also important to note that this October has one less Sunday and Monday, which should positively affect RevPAR. November is still looking decent as well with no calendar composition impacts, but there is a shift in Thanksgiving (one week later) and a slowdown during election week.
Global hotel performance still climbing
Excluding the U.S. global hotel RevPAR climbed 8.3% on a 6.7% ADR gain. Occupancy reached 72.7%, which was the sixth highest level of the year. Among the 10 largest countries, based on supply, RevPAR increased 5.6%, nearly all on a 5.1% ADR increase.
Meanwhile, hotels in Canada and China saw RevPAR decreases of 9.4% and 4.3%, respectively. Canada’s decline came on falling occupancy and China’s on retreating ADR. For the globe, shoulder days produced the highest RevPAR gains (+9.7%) followed by the weekend (+8.3%) and weekdays (+7.3%).
The decline in Canada was due to the calendar shift of Canadian Thanksgiving, which was a week later this year. Most Canadian markets reported occupancy declines with Vancouver down 14.8 percentage points and Toronto down 3.7 percentage points. Quebec was the only exception, with occupancy up 1.4 percentage points.
Among the largest countries, Japan, Italy and Mexico were on top. Japan continued to see strong ADR growth. Italy also had a good week with a 13.9% RevPAR increase driven by a 9.5% increase in ADR. Within Italy, Sicily and Sardinia posted significant gains. Sicily saw occupancy rise 14.9 percentage points with ADR rising 12.7%. Sardinia recorded a 13.5% ADR increase and a 12.3-percentage-point rise in occupancy due to the ITF tennis tournament.
RevPAR in Mexico increased by 13.5%, all on rate growth of 15.5%. Markets contributing to the strong ADR gain included Baja California (+25.5%), Mexico City (+15.5%), Yucatan/Campeche (+15.6%), Pacific South (+14.4%).
Isaac Collazo is vice president of analytics 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.