Hotel demand from families with students on spring break, as well as college basketball teams and March Madness fans during the NCAA men's basketball tournament, drove the U.S. hotel industry to its highest weekly occupancy since the end of summer 2021.
In the week of March 13-19, U.S. hotel industry occupancy reached a level of 66.9%, according to data from STR, CoStar’s hospitality analytics firm. One-fifth of the 166 STR-defined U.S. markets reported their highest occupancy of the past 32 weeks, with 12 markets achieving pandemic-era highs.
Also, for a second consecutive week, U.S. hotel industry average daily rate increased by more than 4%, pushing the weekly level 14% higher than the 2019 comparable. Revenue per available room also increased sharply, up 11% week over week and up 10% from the corresponding week in 2019.
ADR for the week reached $152, the second-highest level ever recorded by STR behind Christmas 2021. A week ago, the same was true.
Adjusted for inflation, ADR was also higher than in the matching week of 2019 by a little more than 1%.
Group demand fell during the week, with 1.4 million rooms sold to groups compared to 1.6 million, a pandemic-era high, the week prior.
Despite the decrease, occupancy at upper-upscale hotels was 67.1%, the highest level since the start of the pandemic. Luxury chains also set a pandemic-era record with 69.3% occupancy.
For the week, the highest occupancy was in the upscale and upper-midscale segments, at 71.5% and 70.1%, respectively, but neither was a pandemic-era high. The week’s upscale hotel occupancy was the fourth highest since the start of the pandemic, while upper-midscale occupancy was ninth best during that time.
Weekday (Monday to Wednesday) occupancy in the top 25 markets for luxury (67.5%), upper-upscale (65.9%), upscale (71.7%) and upper-midscale (70.7%) set pandemic-era highs.
Hotel performance in central business districts continued to improve as well, with occupancy reaching 67.3%, the highest mark since March 2020. Weekday occupancy also hit a high for that period at 63.8%.
For only the seventh time since the start of the pandemic, weekly RevPAR was higher than what it was in the comparable week of 2019. It was also only the third time since March 2020 in which RevPAR surpassed $100, marking the second-highest level of the pandemic era.
“Peak” RevPAR performance — surpassing 2019 levels — was reported in 70% of U.S. hotel markets. On an inflation-adjusted basis, U.S. RevPAR was 4% lower than what it was in 2019 with 49% of markets at “peak” RevPAR.
Over the past four weeks, RevPAR was 3% higher than what it was in the same four weeks of 2019. On an inflation-adjusted basis, RevPAR remained at an 8% deficit to 2019.
Market Highlights
Of the 12 markets that reached pandemic-era highs in occupancy, four were in Texas (Austin, Dallas, Fort Worth/Arlington and San Antonio), four were in Florida (Florida Central, Melbourne, Orlando and Tampa), and two were in Arizona. As a result, Arizona, Florida and Texas also recorded their highest statewide hotel occupancies since the start of the pandemic: Florida (87.4%), Arizona (82.9%) and Texas (72.7%).
Nine of this week’s 10 highest occupancy markets were in Florida, led again by the Florida Keys. Orlando, the nation’s second-largest market based on hotel supply, posted the fourth-highest occupancy, which surpassed 90%. The only market in the top 10 not in Florida was San Antonio, which recorded an occupancy of 86.9%.
Occupancy for the week surpassed 60% at more than 64% of hotels, the most since mid-October.
In the top 25 markets, more than 74% of hotels reported occupancy above 60%, which was the most since July 2021. As a result, occupancy in the top 25 markets was 71.6%, the highest weekly level since early 2020.
The top 25 markets also set pandemic-era records for weekday and weekend occupancy, at 68.9% and 80.7%, respectively. Sunday and Thursday occupancy was 66.5%, the second-highest level of the pandemic era.
Twenty-three markets reported ADR growth of 10% or more, led by Colorado Area (up 19.1%), which includes the ski resorts of Aspen, Beaver Creek and Vail, along with Boulder and Fort Collins. San Antonio and Orlando also reported strong ADR growth of 16.9% and 16.6%, respectively.
Weekdays and shoulder days drove the rate gain, with ADR increasing by more than 6%, whereas the weekend produced only moderate growth of 2.2% even with the highest absolute level of $162. While occupancy continued to grow in central business districts, ADR growth was rather muted at 1.7%. Weekday ADR growth in central business districts was only slightly better at 2.6%.
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.