This week was a bit of a surprise as we expected occupancy to be in a pre-Easter weekend lull.
U.S. hotel occupancy advanced to 66.4% in the week ending April 9, up 2.3 percentage points from the prior week and 3.3 percentage points off the level attained in the corresponding week of 2019. For the industry, this week’s occupancy was the ninth highest since the beginning of the pandemic, but for the luxury (72.2%) and upper-upscale (69.6%) chain scales, it was the highest.
Average daily rate advanced 3.1% in the week to exceed $150, its third-highest level of the pandemic era. Revenue per available room grew a strong 6.8% to nearly $100, the fourth-best level since March 2020. Both ADR and RevPAR remained well ahead of the levels seen in the comparable week in 2019.
Weekday occupancy — which includes Monday through Wednesday — increased the most in the week, up 2.7 percentage points to 64.2%. Weekday occupancy has been above 60% for the past five weeks. Shoulder days — Sunday and Thursday — also saw solid growth of 2.5 percentage points with occupancy rising to 60.1%. Weekend occupancy remained above 70% for an eighth consecutive week.
For the past nine weeks, weekly ADR has been above what it was in 2019, with the most recent week’s result 11% higher. On an inflation-adjusted basis — also known as “real” ADR” — weekly ADR was one percent lower than what it was in 2019. Real weekend ADR has been above 2019 in eight of the past nine weeks while shoulder days have surpassed 2019 in only three of the nine weeks and weekday ADR has yet to do so. Taking a closer look, in 2019 during the nine weeks ending April 9, 44% of industry ADR was attributed to weekdays with 31% comprising weekends and the remainder by shoulders. In 2022, 36% of industry ADR has been from weekends with 39% from weekdays. The contribution from shoulders was essentially unchanged.
Group demand among luxury and upper-upscale hotels reached its highest level since the start of the pandemic. As compared with 2019, group demand in the most recent week was 23% lower with weekday and shoulder group demand down 26% versus the matching week in 2019. Weekend group demand accounted for 30% of this week’s total group demand and continues to be the closest to 2019 levels with the week’s result 13% lower than in 2019. The top 25 markets accounted for the largest growth in group demand this week, led by Orlando. Weekday demand growth was also led by Orlando while D.C. and Seattle also saw solid gains. Nine markets, including Chicago and Orlando, saw their largest group demand since the start of the pandemic.
Looking ahead, the week of Easter should provide a noticeable bump in occupancy given that more than 40% of K-12 schools in the U.S. will be out for a four-day holiday. Additionally, large events are making a comeback, including the New Orleans Jazz and Heritage Festival along with Coachella. May is also expected to see a surge in in-person college graduations, which will further fuel demand as we head into the summer.
Market Highlights
What was even more surprising was the continued recovery in the U.S. top 25 markets and central business districts. While there is still a sizeable gap to 2019, the recent trend and overall outlook is encouraging.
Top 25 market occupancy reached 71%, which was only its third time above 70% for that group since the pandemic began with all three occurrences happening in the past four weeks. Like the overall industry, the largest increase in demand was seen in the weekdays, which accounted for 46% of the demand gain week on week.
Orlando, Seattle, and Washington, D.C., made up more than half of the weekday room-night growth within the top 25 markets. D.C. and Seattle both recorded their highest weekday occupancies of the pandemic era. Other gainers included San Diego, Miami and New York City. New York City weekday occupancy at 74.6% was its second highest since March 2020 and has been above 70% for the past four weeks. Even though that occupancy is near a pandemic high, it was still more than 13 percentage points lower than what it was in 2019. The good news is that the occupancy gap to 2019 has been lessening over the past four weeks. The same trend was seen in Orlando, where weekday occupancy surpassed 80% and was four percentage points higher than what it was in 2019, which is only the third time this has happened since the pandemic began.
Eight markets outside the top 25 achieved pandemic-era occupancy records including Savannah at 88.6% and Augusta at 87.8%, with the latter benefiting from the Masters Tournament. These two markets also led the nation in occupancy. Charleston, Charlotte, Columbia, Jacksonville, Raleigh/Durham, and San Jose were the others that recorded pandemic-era highs in occupancy this week.
Occupancy in central business districts reached its highest weekly occupancy level of the past 109 weeks, up 3.1 percentage points to 70% as five central business districts — Austin, Philadelphia, San Diego, Seattle, and D.C. — saw new highs. Shoulder (65.8%) and weekday (67.1%) central business district occupancy were also the highest of the pandemic period. While central business district occupancy continues to climb, the gap to 2019 widened to 16 percentage points, the largest of the past four weeks.
Thirteen markets reported their highest nominal ADR of the pandemic era this week including Augusta, Memphis, New Orleans, Philadelphia, and D.C. Overall, 141 of the 166 STR-defined U.S. markets had nominal ADR above 2019, up from 138 a week prior but down from 150 two weeks before. Real ADR was higher in 79 markets. For the year, 56 markets have a real ADR above 2019, up from 11 a year ago.
Although industry nominal RevPAR was only the fourth highest of the pandemic era, top 25 markets at $127 and central business districts at $162 reached a pandemic-era high. Among the top 25 markets, New Orleans and D.C. saw their nominal RevPAR reached its highest level of the past 109 weeks.
In central business districts, New Orleans, Philadelphia, San Diego, Seattle, and Washington, D.C., reported pandemic-era records for nominal RevPAR. Overall, Maui had this week’s highest nominal RevPAR at $483 followed by the Florida Keys at $442 and Hawaii/Kauai at $354. Augusta had the nation’s fourth-highest nominal RevPAR at $344. A week prior, Augusta was ranked 62nd, and two weeks prior, it was 136th of the 166 STR-defined markets.
Real industry RevPAR was the sixth highest so far, and coincidentally, six markets reported their highest Real RevPAR of the pandemic era including Augusta, Charleston, Columbia, New Orleans, and Savannah. For the week, 111 markets saw their nominal RevPAR surpass 2019 comparables, and 69 markets reported real RevPAR higher than in 2019. For the year thus far, 53 markets are above their 2019 levels on a real basis.
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.