U.S. hotel occupancy fell for a third straight week, but largely as a result of higher supply, the industry sold more rooms in the week of Halloween than it ever has before.
The latest data from CoStar hospitality analytics firm STR, for the week ending Nov. 5, shows weekly hotel demand — the number of hotel room nights sold — was down 5.7% from the previous week, when the industry set another demand record, selling more rooms in the 45th week of the year than ever before.
The industry sold 24,183,556 room nights, the most ever in a week that included Halloween. The previous record was set in 2019, when 23,780,560 room nights were sold. Occupancy, however, was higher in 2019 by a tenth of a percentage point, because the industry had fewer rooms to sell that year. Supply is up 1.9% since 2019.
Though hotel demand typically drops in the week of Halloween, as families stay home, week-over-week demand decline was higher than expected.
Demand for hotel rooms on Sunday and Monday fell nearly 20% week over week due to timing of Halloween, leading to a sharp decline in occupancy that lingered into Tuesday and Wednesday. U.S. hotel occupancy for the week was 62.4%. Occupancy was 65.8% in the previous week and 69.9% two weeks ago.
Much of the demand decline came from group business as meeting planners paused events. Demand at conference hotels in the luxury and upper-upscale chain scale was down more than 50% week over week for the Sunday and Monday.
The resurgence of group business was swift, however, as the decline moderated significantly on Tuesday with strong week-over-week gains thereafter. Thursday’s group demand was the highest of the fall conference season thus far.
The general industry also saw demand bounce back post-Halloween. Excluding Sunday and Monday, demand was nearly flat week over week with occupancy of 68.2%. Weekend (Friday and Saturday) occupancy reached 73.1%.
Average daily rate also fell 3.7% week over week to $148, leading to an 8.6% decrease in revenue per available room. This was the second week that RevPAR fell by more than 8% week over week. Inflation-adjusted, or real, ADR and RevPAR also decreased, with both measures below what was recorded in the same week of 2019. However, in 2019 there was no impact from Halloween as it fell on the previous Thursday that year. Compared to 2021, ADR and RevPAR were 15% and 20% higher, respectively.
As with demand and occupancy, nominal ADR improved after Halloween, with slight week-over-week growth Thursday and into the weekend. Even with the stunted movement, nominal ADR remained well above 2019 post-Halloween (+13%) with real ADR just below the 2019 level. Weekend real ADR, however, surpassed 2019 by 5%.
Market Highlights
A few markets bucked the downward trend in ADR with 35 markets reporting growth and 10 of those with nominal ADR more than 10% higher week over week. Smaller markets including Lexington, Kentucky, and Chattanooga, Tennessee, led the nation in week-over-week ADR growth, up 45% and 29% respectively. Among the larger markets, Miami hotel ADR was up 15%. Seventy-six markets had nominal ADR growth over the weekend, with the strongest gains in college football markets.
Nearly all markets (151 of 166) had nominal 28-day RevPAR above 2019. Oakland and Portland, Oregon; and San Francisco and San Jose, California, were notable exceptions. More than half of all markets had real, 28-day RevPAR above 2019 levels, led by Florida markets Sarasota and Fort Myers. Six of the top 25 markets also had real, 28-day RevPAR above 2019 including Miami, Orlando, San Diego and Tampa.
Weekly demand increased in 24 of the 166 STR-defined U.S. hotel markets, including Charlotte, Miami and New Orleans. All three markets also reported occupancy above 70% for the week, with occupancy strengthening into the weekend.
Even including markets that lost demand due to Halloween, 22 had occupancy above 70% for the week, led by Fort Myers, Florida, at 84.4% occupancy and followed by New York City at 82%.
From Tuesday onward, 54 markets had occupancy above 70%, led by NYC at 87.6% and Fort Myers and Phoenix, both at 85%.
Elevated occupancy in Fort Myers is in part due to the aftermath of Hurricane Ian, as a result of rebuilding efforts and housing of those impacted by the storm.
The weekend wasn’t the strongest of the fall season so far, but it wasn’t the worst either. Occupancy in half of all U.S. markets pushed above 70%, with nearly a fifth above 80%. Chattanooga, Tennessee, recorded the highest weekend occupancy at 92.5%, followed closely by NYC at 91%. The number of markets with weekend occupancy above 70% was higher than in the previous week but lower than three weeks ago.
In the top 25 markets, full-week occupancy was 68%. In Halloween week of 2019, top 25 occupancy reached 69.9%, nearly two percentage points higher than this year’s results. But that year, Halloween was on a Thursday and in week 44, instead of week 45.
From Tuesday to Saturday, occupancy in the top 25 markets increased to 74.2%, slightly above the prior week but below 2016 when occupancy for those days reached 79.1%.
However, this year’s room demand from Tuesday through Saturday was the highest ever for a Halloween week. Occupancy after Halloween surpassed 70% in all but five of the top 25 markets. Weekend occupancy for the top markets climbed to 78.3% from 74.3% a week prior. In addition to NYC, seven other top 25 markets reported weekend occupancy above 80% — including Chicago, Los Angeles, Nashville and Orlando. Weekend occupancy in Boston, New Orleans and Philadelphia was right below the 80% mark.
A similar pattern emerged in performance data for central business districts, most of which had occupancy bounce back after Halloween. From Tuesday onward, occupancy topped 80% in seven of the 20 CBDs, led by the New York Financial District at 87%.
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.