U.S. hotel occupancy, rates and revenue declined overall in the latest weekly performance results, while hotel demand shifted somewhat to larger urban markets and group bookings.
Data from CoStar hospitality analytics firm STR for the week ending March 5 shows that weekly hotel occupancy was 61.2%, down one percentage point from the previous week, which included the Presidents Day holiday. A weaker performance on Sunday dragged the occupancy average down two percentage points.
Average daily rate was down 4.2% from the previous week, but still was 5% higher than what it was for the comparable week of 2019. The biggest difference in ADR again was on Sunday, when the metric was down 12%.
As a result of lower occupancy and ADR, revenue per available room decreased 5.7%, but was 96.1% of the 2019 level. The weekly ADR and RevPAR declines were the steepest since the week after Christmas.
On the bright side, weekend hotel occupancy — Friday and Saturday — surpassed 70% for the third consecutive week, advancing to 71.1%. The last three-week streak of 70% weekend occupancy occurred in October.
Occupancy also improved for an eighth consecutive week in the top 25 largest U.S. hotel markets, where the weekday average between Monday and Wednesday was 60.2%.
Group demand for hotels also increased, as nearly 4 million room nights were sold to groups. That demand still is only 55% of what it was in the comparable week of 2019. Group demand was slightly higher in the top 25 markets, where it reached 56% of 2019 levels; and at upper-upscale hotels, where it was 66% of what it was in 2019. Compared to 2019, more of that group business is being booked over the weekend.
Of the 166 STR-defined markets, more than 80% reported ADR that was higher than what it was in the same week of 2019. Adjusting for inflation, U.S. ADR was 6% lower than the 2019 level, with 37% of markets achieving higher ADR than they did in 2019.
While ADR also declined in the top 25 markets, the decrease was much less — down 2.5%. Weekday ADR in the top 25 markets was flat compared to the previous week, while for all other markets it was down 6%. Weekday ADR in central business districts was up 7.9%, driven by robust gains in New Orleans, Los Angeles and Washington, D.C.
For the week, 60% of markets achieved “peak” RevPAR, beating 2019 comparisons, while another 29% were in the “recovery” category with RevPAR between 80% and 100% of 2019 levels. Adjusted for inflation, U.S. hotel industry RevPAR was 86.2% of the level achieved in the comparable week of 2019, with 57% of markets at “peak” and 34% in “recovery.” Over the past 28 days, RevPAR indexed at 87% of 2019 levels, the highest of the past eight weeks.
Market Highlights
Weekly hotel demand declined in the more leisure-oriented top 25 markets such as Orlando, Miami, Los Angeles and San Diego, which had benefited from the Presidents Day holiday. Meanwhile, demand grew for hotels in San Francisco, New York and Washington, D.C., as well as 12 other top 25 markets.
New York City weekday hotel occupancy rose to a nine-week high of 58.4%, while in Washington, D.C., weekday occupancy increased to 52.6%, its highest since mid-November and only its ninth time above 52% since the presidential inauguration.
While weekday occupancy fell in Orlando, the nation’s second-largest market, it remained strong at 70.7%, which was the fourth highest of the top 25 behind Phoenix at 75.1%, Miami at 78.1% and Tampa at 80.3%.
Overall, U.S. weekday occupancy climbed to 58.5%, a level last reached in October.
Central business districts within the top 25 markets averaged 52.1% weekday hotel occupancy for the week, an improvement of more than 4 percentage points over the previous week and the highest level of the past 12 weeks.
Weekday occupancy has risen in central business districts by more than four percentage points in three of the past four weeks.
Washington, D.C., posted the largest weekday hotel occupancy gain among the central business districts — up 19.9 percentage points to 54.5%, the best since October. Houston’s central business district reported strong growth as well with occupancy rising to 72.7%.
The Tampa and Miami central business districts led all central business districts in hotel occupancy for the week while Minneapolis continued to report the lowest weekly occupancy at 21.7%, up a half point from the previous week. Hotel occupancy in New York’s financial district increased by more than five percentage points to 57%.
Daytona Beach had the highest weekend occupancy at 94.1%, followed by Tampa at 93.9% and Salt Lake City at 91.8%.
Thirty-two markets reported occupancy at or above 80% for the weekend, up one from the previous weekend. Only 19 markets reported weekend occupancy below 60%, the second smallest number of the past 16 weeks behind the Presidents Day weekend when 16 markets were in that grouping.
Top 25 markets achieved slightly stronger weekend occupancy at 72.6%, but that was down slightly compared to the previous weekend due to declines in markets including New Orleans, which lost 10.2% in occupancy post-Mardi Gras.
Orlando hotels continued to excel with weekend occupancy of 90.6%, the market’s third highest since the start of the pandemic.
At the property level, 45% of U.S. hotels reported occupancy at or above 80% over the weekend.
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.