A global IT outage that canceled thousands of flights during the peak of the U.S. summer travel season culminated in an impressive showing for U.S. hotels during the week of July 14-20.
The major tech outage that occurred Friday, July 19, sent ripples across the global travel industry, especially airlines, but U.S. hotel performance over the five days before the outage was even stronger, as revenue per available room rose 4.1% year over year.
The tech outage drove stronger weekend performance results on Friday and Saturday in airport hotels. Airport weekend occupancy increased 3.6 percentage points compared to 0.6 percentage points for the industry. Average daily rate increased 2.4% vs. 1.2%, resulting in RevPAR up 6.9% vs. 1.9% for the hotel industry.
Across the top 25 U.S. hotel markets, Minneapolis, Atlanta, Denver and Chicago all saw weekend performance at elevated levels relative to the rest of the week. Large hotel markets outside the top 25 that appeared to see a performance bump were Indianapolis, Kansas City, Pittsburgh and Salt Lake City.
One silver lining from the tech outage is the lingering lift for airport hotels and several markets in the next data we process.
U.S. hotel performance bounced back during the week ending July 20 with U.S. RevPAR up 11.4% week over week and 3.4% year over year. That growth pushed the metric to $122.04, the highest level for any week on record. However, RevPAR was 2.2% below 2019 levels when adjusted for inflation.
The U.S. hotel industry returned to patterns seen for most of the year with the top 25 markets, weekdays and group driving the strong performance. Chain-scale bifurcation also continued with hotel segments at the upper end posting better results than those at the bottom. All chain scales, except economy hotels, saw RevPAR growth. The economy segment was flat from last year, which was the best year-over-year result in the segment since eclipse week in early April.
US Hotel Occupancy Reached Highest Level Since the Pandemic
U.S. hotel occupancy rose 0.7 percentage points year over year to 73.5%, the highest level since the pandemic. The last time occupancy surpassed 73% was in the summer of 2019, and it was this week in 2019 that produced the highest occupancy of that year at 77.7%. The highest weekly occupancy ever posted was 79% in the week ending July 25, 2015. Like in 2019, 2024’s occupancy peak has likely been attained, with occupancy next week — ending July 27 — expected to drop slightly followed by continued declines as summer comes to an end.
Average daily rate rose 2.4% during the week ending July 20, which was the best gain of the past three weeks. For comparison, when occupancy peaked in 2019, ADR only increased 0.8%.
Weekends, or Friday and Saturday, continued to have the highest occupancy (79.4%) while weekday occupancy from Monday to Thursday was 73.9% and showed the greatest growth. Weekdays produced the strongest RevPAR gain — which rose 4.5% — lifted by a 3.2% ADR increase and a 0.9-percentage-point occupancy lift. Weekend RevPAR increased 1.9%, thanks to a 1.2% ADR increase and a 0.6-percentage-point occupancy increase.
Top 25 Markets Continue To Drive Industry Performance
RevPAR across the U.S. top 25 hotel markets increased 4.8% year over year driven by both occupancy — which rose 2.2 percentage points — and ADR, which jumped 1.8%. Weekday performance was strongest with RevPAR up 6% on 2.7-percentage-point occupancy growth that was slightly stronger than ADR’s increase of 2.3%. RevPAR in the rest of the country grew 2.3% with weekdays seeing the strongest performance, up 3.5%. Weekends increased only 0.6%.
Houston posted a strong overall week as it recovers from Hurricane Beryl. Las Vegas, Detroit and New Orleans also experienced double-digit RevPAR gains.
Almost All Chain Scales Elevated by ADR and Weekdays
ADR drove RevPAR gains across the middle four chain scales with upscale hotels posting the largest RevPAR increase (+4.2%) followed by upper upscale (+3.7%), upper midscale (+3.3%) and midscale (+2.1%). Luxury saw 0.7% RevPAR growth via occupancy.
Weekday RevPAR ranged from 5.3% growth in upscale hotels to just a 0.2% bump in luxury hotels with all chain scales seeing growth. Luxury chains increased occupancy by 2.9%, offsetting an ADR decrease of 2.1%. Sunday posted the strongest luxury chain RevPAR performance (+7.1%) with weekdays and weekends up 2.3%. Economy hotel chain performance was muted with occupancy up 0.3% and ADR down 0.4%. Changes across the days of the week were within one percent of each other.
Hotel Group Demand Returned, Lifted by the Top 25 US Markets
As is typical, group performance in luxury and upscale hotels rebounded this week, buoyed by the top 25 U.S. hotel markets. Group demand increased 9.1% with the top 25, seeing a 14.5% increase versus 5.3% for the rest of the country. Group ADR increased 5.3% overall, with the top 25 markets growing ADR by 5.8%. Seventeen of the top 25 markets saw group occupancy rise, with four markets — Houston, Las Vegas, Minneapolis and New Orleans — experiencing occupancy increases of 10 percentage points or more.
Transient performance across luxury and upper-upscale hotels improved modestly year over year, with demand flat and ADR up 1.2%. Transient demand was above 2019 levels by 2.1%, while group demand was still at a deficit, down 4.9%.
Looking Ahead as Summer Wanes
Based on long-term historical trends, next week’s data — ending 27 July — is expected to show slight softening as the U.S. summer travel season begins to wind down. In the first full week of August, 1 in 4 K-12 students will be back in class, according to STR's 2024-2025 School Break Report.
Group business is expected to continue at elevated levels along with weekday travel in the top 25 U.S. hotel markets.
Global RevPAR Above $100 for the Sixth Consecutive Week
Global RevPAR, excluding the U.S., increased 4.7% year over year, driven by a 4.4% ADR increase as occupancy remained relatively stable — up just 0.2 percentage points — at 73.3%, the highest of the year.
Across the largest countries by existing hotel supply, Indonesia continued to lead in performance gains, supported by a mix of occupancy and ADR. Eleven out of its 12 markets saw occupancy increase, led by Jakarta — up 11.6 percentage points to 75.2% — and Kalimantan, which rose 11.1 percentage points to 79.6%. ADR increases were also seen in 10 markets, with Bali (+18.9%) and Jakarta (+15.4%) recording the greatest gains.
The final match of the Euro 2024 tournament produced the third highest ADR on record for Berlin on Sunday, July 14, up 198.8% to $382, while occupancy grew 11 percentage points to 87.3%. This helped lift the entire country’s results for the whole week, as occupancy rose 3.4 percentage points and ADR increased 8.3%.
In the week leading up to the Olympics, France continued to be affected by displacement, with a 9% RevPAR decline caused entirely by declining occupancy, which fell 7.3 percentage points. Looking forward, Paris occupancy on the books for the Olympics opening ceremony, as of July 22, stood at 90% with demand for the remainder of the games at 83.1%, up 26.8% versus the same period last year.
The remainder of the world will also see slowing occupancy and solid ADR growth. Indonesia’s strong performance is expected to continue along with robust performance in Paris as the Olympic Games begin.
Isaac Collazo is vice president of analytics at STR. Chris Klauda is senior director of market insights at STR. William Anns is a research analyst 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.