U.S. hotel revenue per available room flatlined — down 0.2% — for the week ending Jan. 25 due to the MLK holiday, which was a week later this year.
The past six weeks have oscillated with RevPAR changes varying by more than 15 percentage points each week. The most recent week’s daily performance also included ups and downs, but mostly downs. Sunday produced a RevPAR increase of 34.4% due to the extended holiday weekend, but Monday through Wednesday RevPAR fell 7.4%, and the rest of the week was down 0.6%.
Two markets were lifted by noteworthy events. Washington, D.C., hosted the presidential inauguration, and D.C.’s Sunday hotel RevPAR increased 561.4% with Monday RevPAR up 256.5%. Atlanta welcomed the College Football Playoff Championship game, resulting in hotel RevPAR gains of 147.6% and 90.1% for Sunday and Monday, respectively. Those two events added 12.7 percentage points to Sunday RevPAR growth in the U.S. and 8.6 percentage points to Monday. Without those two markets, Monday’s RevPAR would have been down 16.8%.
Other U.S. hotel markets seeing large gains on Sunday were leisure-led and included Gatlinburg/Pigeon Forge, Tennessee; Pennsylvania South; the California Wine Country; and Vermont. In each of those markets, RevPAR growth soared by more than 100%.
North Carolina West also posted RevPAR growth of more than 100%; however, gains continued throughout the week. The strong Sunday performance indicates leisure business is returning to this market while still seeing long-term demand due to hurricane recovery.
Hurricane displacement demand shifted due to the holiday
Room demand remained elevated across the 13 markets identified as having been significantly affected by the fall hurricanes. However, this week, only four markets experienced double-digit room demand primarily driven by the calendar comparison to last year when the MLK holiday was a week earlier. We expect these markets to begin returning to more normal patterns as the hurricane impact starts to wane.
ADR gains and occupancy declines common across the chain scales
Hotel performance across the chain scales was atypical this week with all chain scales posting ADR gains and occupancy declines. Much of this was due to Sunday’s impact. RevPAR changes were in the double-digits for all chain scales on Sunday, ranging from up 59.9% in luxury to up 7.1% in economy hotels. Washington, D.C., and Atlanta had some impact, but even without those markets, all chain scales saw year-over-year growth.
Removing Sunday from the mix, chain-scale RevPAR moderated considerably. The metric remained positive in luxury (+5.4%) and economy (+3.2%) with ADR driving the increase. In the remaining chain scales, RevPAR decreased due to occupancy declines, which was not surprising given it was a short week due to the holiday.
Wildfire impact around Los Angeles
Hotel demand in the greater Los Angeles area – STR-defined markets: Los Angeles, California Central Coast, Inland Empire, and Orange County – remained elevated, up 7% between Jan. 7-25. The two submarkets that are seeing the sharpest gains are Pasadena/Glendale/Burbank and Los Angeles East – between Pasadena and San Bernardino – where demand in the most recent week was up 34.1% and 28.1%, respectively, matching similar demand levels seen last week.
Four additional submarkets maintained high demand in the last two weeks: Monterey/Salinas, Los Angeles North (San Fernando Valley), Riverside Surrounding and Los Angeles Southeast. Hotel demand in Oxnard/Ventura and Riverside & San Bernardino remained high but softened considerably since the prior week. Three other submarkets — Santa Barbara, Palm Springs, and Newport Beach — have seen demand growth dip down to single digits.
On the flip side, hotel demand remained down in the Los Angeles Central Business District (-4.6%) and Hollywood/Beverly Hills (-18.1%). The good news is these declines were less steep than the prior week.
Overall, RevPAR in the greater LA area is up 6% since the start of the fires, led mostly by occupancy gains with a few exceptions. For the week ending Jan. 25, RevPAR in the area increased 4.8% due to occupancy gains (+3.7%) as ADR declined 1%. Of the 24 submarkets in greater Los Angeles, two continued to see double-digit RevPAR declines: Los Angeles Central Business District (-10.4%), and Hollywood/Beverly Hills (-14%). Disneyland, which saw steep declines immediately after the fires saw RevPAR decrease just 1.1%. Santa Monica (-4.8%) and South Bay (-5.4%) also saw RevPAR fall while the rest of the submarkets registered growth for the week.
Group demand slowed by the calendar shift
Across luxury and upper-upscale hotels, group demand declined 10.9% year over year following a 21.6% increase in the previous week. ADR rose 8.8% for the week. Both the top 25 hotel markets and the rest of the country experienced similar demand declines.
The weeks ahead for US hotels
This week’s slowdown was expected, and we project next week’s data to show improvement. With a clean calendar, we will have a clearer view of what the next few weeks will produce. January is estimated to end with U.S. hotel RevPAR growth around 3%.
Occupancy on the books for the next 90 days as of Jan. 27 is generally positive with only a few down days, which bodes well for first-quarter performance. With the Super Bowl just around the corner, occupancy on the books for New Orleans is 88% with the Central Business District/French Quarter at 95%.
The Los Angeles fires will continue to impact the market and surrounding areas, however, the impact seems to be lessening on both the positive and negative sides. Likewise, hurricane recovery, which has boosted markets over recent months, should also start to dissipate.
Lunar New Year contributes to steepest global occupancy decline since early 2024
Excluding the U.S., global hotel weekly RevPAR increased 7.1%, driven entirely by ADR gains as occupancy declined 3.1 percentage points. That decrease was the largest around the globe since February 2024, due largely to the shift in the Lunar New Year.
China’s hotel performance softened due to the start of the Lunar New Year, which is two weeks earlier this year compared to last year.
Hotels in Japan once again posted the largest RevPAR gain, up 34.5%, with all 11 STR-defined markets seeing growth. ADR continues to be the main driver of this growth, which is fueled in part by the weaker yen.
Mexico also continued to see strong hotel performance, as RevPAR increased 25.2%. Similar to Japan, ADR is driving the growth, which is likely due to a weakened peso against the dollar. Demand for the country was down for a third consecutive week.
Globally, we will be watching occupancy following this week’s decline. Japan, Mexico and Indonesia are expected to see ADR-driven RevPAR growth, due in part to their weak currencies. Countries in Europe should see a return to normal business patterns, which will produce more stable performance.
Isaac Collazo is senior director of analytics at STR. Chris Klauda is senior director of market insights 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.