In the first week of October, U.S. hotel industry occupancy climbed to 67.8%, nearly flat compared to the same week last year, which included the Yom Kippur observance — typically a low-travel holiday.
U.S. hotel average daily rate for the week was 5.4% higher than a year ago, the largest year-over-year percentage increase since early May helped by the easy year-over-year comparisons. ADR growth has improved steadily in each of the past five weeks.
The easy comparison was particularly evident as weekly hotel performance was strongest on weekdays (Monday-Wednesday), when occupancy was up 1.4% year over year. Occupancy was down on the weekend and shoulder days (Thursday and Sunday) by 1.9 percentage points and 0.7 percentage points, respectively. This is typical of the fall travel season, as business travelers and groups replace vacationers as the top bookers.
Other trends in performance data support the pickup in business and group travel.
The top 25 markets — locations heavily dependent on demand from those business and group demand segments — reported weekly occupancy of 72.7%, the fourth week above 70%, and up 1.7 percentage points from a year ago. ADR increased 7% year over year, leading to an 8.9% increase in RevPAR, the largest gain since the week of May 6.
Like the remainder of the country, growth was concentrated on weekdays where occupancy increased 6.7 percentage points year over year with ADR up 13.5% resulting in a 21.1% gain in weekday RevPAR. Top 25 weekend occupancy fell 2.7 percentage points while shoulder days were flat, up just 0.1 percentage points. RevPAR was also down over the weekend (-0.7%) but up in the shoulder period (5.5%).
New York led the top 25 markets in weekday occupancy at 87.5%, and on the shoulder days at 82%. Boston led on the weekend with 92.6% occupancy. Both markets posted strong weekly RevPAR gains of more than 20% year over year.
Weekly RevPAR growth in the next 25 largest markets ranged from 26.1% year over year in Cleveland to down 5% in Oklahoma City. Overall, nine markets saw double-digit RevPAR growth this week with three — Cleveland, Indianapolis, and Inland Empire, California — above 20%.
Fall foliage drove demand in markets such as Portland, Maine; Gatlinburg, Tennessee; and Vermont. Markets throughout the country saw a weekend boost from college football games.
Group demand — or the number of room nights sold to groups booking more than 10 rooms — increased 20% year over year, helped by an easy comparison to last year. Over the past four weeks, group demand has been up an average of 12% year over year and down only 2% compared to the same four weeks in 2019.
The top 25 hotel markets that posted the largest year over year group demand increase over the past four weeks are San Francisco (20.5%), Oahu (15.7%), Washington, D.C. (10.5%), Boston (6.8%), Philadelphia (6.4%) and Minneapolis (6.1%).
Global Performance
Global hotel occupancy excluding the U.S. was 69.5% in the first week of October, up 0.8 percentage points from the previous week. Compared to last year, occupancy was up 6.8 percentage points, the largest year-over-year increase since May 2023. ADR climbed to $161, up 18.7% year over year RevPAR grew 31.5% to $112.
Occupancy for the top 10 countries based on supply increased 8.2 percentage points year over year to 70.1%. ADR increased 17.6% to $157, which was the highest result since the last week of June. RevPAR grew 33.1% to $110.
All countries of the top 10 countries, except Germany, posted year-over-year occupancy gains, with the largest growth in China, up 16.3 percentage points to 63%. Japan posted the second highest occupancy gain, up 7.1% to 72.4%. Both countries were boosted by the autumn holidays.
Spain was close behind Japan in growth, with occupancy increasing 6.3% to 83.1%, which was the highest occupancy level of the top 10 countries.
Isaac Collazo is vice president 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.