A record-setting Memorial Day holiday weekend for U.S. hotel room demand extended into Monday night as more guests than ever before opted to check out Tuesday to begin traveling home.
This Memorial Day Monday beat out 2021 as the best ever for hotel room demand — the number of hotel roomnights sold — as well as setting records in average daily rate and revenue per available room, even when adjusted for inflation, according to the latest weekly data from CoStar hospitality analytics firm STR.
Hotel demand is relatively low for a Monday holiday, as most travelers typically start the long weekend on Friday and head home on Monday.
Compared to the previous Monday, hotel occupancy was down significantly on Memorial Day, accounting for the largest share of a 3.3 percentage point drop in weekly occupancy to 63.2%, the lowest level of the past eight weeks.
U.S. hotel performance also slumped in the week following the Memorial Day holiday.
Overall, room demand fell in five of the seven days, with increased demand reported only on Sunday and Thursday. ADR for the week ending June 4 was down 3% from the previous week to $147. With occupancy and ADR falling, revenue per available room was down 7.8% week over week, the third-largest weekly decrease of the year, to $93. All three measures — occupancy, ADR and RevPAR — were up year over year, though the gains were the smallest of 2022 so far.
The gains in the three-day weekend and in Memorial Day room demand were led by upscale and upper-midscale hotels, which both set room demand records. Luxury and upper-upscale hotels trailed the record performance of 2019 both over the weekend and on Monday. However, for midscale and economy hotels, the room demand record for the three-day weekend was set in 2000, but for Memorial Day, the record was established last year. ADR and RevPAR for both the three-day weekend and Memorial Day were the highest ever recorded on both a nominal and inflation-adjusted basis.
The Hawaii/Kauai hotel market led the U.S. with 77.4% occupancy for the week, as only 16 of the 166 STR-defined markets reported weekly occupancy above 70%. Additionally, more than 80% of markets reported a week-over-week occupancy decrease. Occupancy in Phoenix, Boston and the Florida Keys was down by 10 percentage points or more. Oklahoma City led the nation in week-over-week occupancy growth — up 7.7 percentage points — followed by Wisconsin South and Gatlinburg/Pigeon Forge. No market set a pandemic-era occupancy record this week.
Weekend occupancy fell 3.2 percentage points to 74.8%. The highest weekend occupancy was reported in Oklahoma City at 89.6%, driven by one of two Pride events scheduled in June. Chicago’s hotel market had the second-highest weekend occupancy at 89.2%. In total, 34 markets achieved occupancy of 80% or more over the weekend. While no markets set pandemic-era occupancy records for the week, four did over the weekend including Chicago, Oklahoma City, Columbus and Seattle.
Weekday occupancy was noticeably down following the holiday weekend with Tuesday and Wednesday at 58.9%, which was the lowest level since mid-February. Tuesday and Wednesday occupancy was a bit better in the top 25 markets at 60.4%, but lower in central business districts at 56.7%. However, hotels in four central business districts — Denver, Los Angeles, Portland and San Diego — did report a weekly increase in occupancy, led by Denver at 82.5% for the week.
New York City occupancy also declined with weekly occupancy at 75% after coming in at 82.8% a week prior. The level was still elevated versus what it was several months ago. Nine of the city’s 10 highest occupancy levels of the pandemic-era have occurred in the past nine weeks. Weekend hotel occupancy in the market rebounded to 82.3% and has been above 80% in 10 of past 12 weeks. In 2021, weekend occupancy only reached that level seven times.
While down, weekly ADR retained some of its strength with a level that was the 11th highest of the pandemic-era. Biggest gains week over week were in Oklahoma City (+14.3%), followed by Wisconsin South (+12%) and Columbus (+10.9%). In total, 20 markets posted weekly ADR growth above 5%. Compared with last year, weekly ADR was up 18.5% nationally. Some of ADR strength came from growth on Sunday of the holiday weekend. Excluding that day, ADR was down 5% week over week. ADR fell every day week over week except Sunday (+10%) and Thursday (+2.6%). The largest daily ADR declines were reported on Monday (-9.6%), Tuesday (-8.5%), and Saturday (-9.2%).
Total weekly ADR was down in the top 25 markets (-4.3%) and central business districts (-3.4%). However, central business district weekend ADR ($257) was second highest of the pandemic era, increasing 4.1% from the previous week, led by sharp gains in Chicago (+45.6%), Seattle (+19.9%), Minneapolis (+16%) and eight other central business districts.
Like ADR, RevPAR decreased in all days after the holiday with the exception of Thursday, when it was up 7.7%. RevPAR for the week was down 10.9% in the top 25 markets and down 13.5% in the central business districts, with Tuesday and Wednesday accounting for the largest percentage of the decrease.
Weekend RevPAR was down 10.7% nationally, but down only 8.1% in the top 25 markets and down only 1% in central business districts. Collectively, the top 25 and central business district figures were boosted by strong growth in Chicago, Minneapolis, Seattle and others. Chicago’s weekend ADR reached $211, the seventh highest in the country. Maui led the nation with weekend RevPAR of $409. The market also had the country’s highest full-week RevPAR at $391. Weekly RevPAR was up 21.5% as compared with the same week a year ago.
Over the past 28 days, 83% of U.S. markets reported nominal RevPAR at “peak” levels, above 2019, and nearly every other market was in “recovery,” with RevPAR between 80% and 100% of 2019. On an inflation-adjusted basis, 43% of markets achieved “peak” RevPAR with 49% in “recovery.”
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.