U.S. hotels produced healthy growth in revenue per available room for a fourth week in a row.
RevPAR increased 3.1% year over year – all comparisons are year-over-year unless otherwise noted – on equal gains in occupancy and average daily rate. Performance was lifted by the shift of Halloween from Tuesday last year to Thursday this year as well as corporate travel squeezed in ahead of the U.S. election.
These two factors compressed travel for conferences, meetings and general business into the start of the week. This is evident as all the U.S. hotel performance growth occurred Sunday through Tuesday with RevPAR rising 38.6%. Thereafter, from Wednesday through Saturday RevPAR declined 13.2%. On Halloween, RevPAR decreased 27.1% on an occupancy level of 53%. While the hotel RevPAR decrease this Halloween was slightly more, this year’s occupancy was 1.6 percentage points higher. In 2019, when Halloween was also on Thursday, U.S. hotel occupancy was almost identical at 53.9%.
Additionally, like in previous weeks, ongoing hurricane recovery efforts, Taylor Swift, and college football games drove demand gains across various markets.
Demand remains elevated in Southern US hotels
For a second consecutive week, weekly hotel demand was higher than the comparable weeks in 2019 and 2023. More than two-thirds of the week’s demand increase came from markets in the South. The largest demand gainers were in areas affected by Hurricane Helene and Hurricane Milton, including Augusta, Georgia; Columbia, South Carolina; Daytona Beach, Florida; Florida Central South; Greenville/Spartanburg, South Carolina; Sarasota, Florida; and Tampa.
Other events in the region driving hotel demand included the Florida-Georgia football game in Jacksonville and the International Boat Show in Fort Lauderdale, both occurring one week later this year compared to last year providing a favorable comp. New Orleans also benefited from the final performance of Taylor Swift’s Eras Tour in addition to a large conference early in the week.
Hotel demand was also up in the Northeast and Midwest. The Northeast contributed just under one-third of the week’s demand buoyed by strength in New York City – RevPAR jumped 20.7% – that was capped by the New York City Marathon on Sunday, Nov. 3. New York hotels continued to lead the nation in occupancy (90.2%) as it has for the past four weeks.
Football games boosted hotel RevPAR performance in smaller Northeast markets. These include the Pennsylvania Area, which contains State College, home of Penn State University – up 63.8% for the week and 144.7% for the weekend during the Nittany Lions’ Saturday game against Ohio State – and Buffalo, with RevPAR up 17.5% for the week and 51.6% for the weekend of the Bills’ victory against Miami. Hotels in Hartford, Connecticut – where RevPAR rose 25.8% – delivered a solid performance across the whole week.
Hotels in the Midwest contributed 22% of the demand increase. Minneapolis posted the top spot as RevPAR increased 39.5% thanks to the impact of a convention calendar shift. Next was Indianapolis hosting Taylor Swift’s tour, and hotels in the market reported RevPAR gains of 27.2% for the week and a whopping 181.1% over the weekend. Indy’s weekend RevPAR of $338 was topped only by New York City ($407).
The West region saw hotel demand declines due to soft weeks in Las Vegas and San Francisco with Las Vegas unfavorably affected by a convention calendar shift. San Diego was the bright spot in the West with a weekly RevPAR gain of 34.2% and the first three days of the week producing RevPAR gains of over 70%.
Group demand posts seasonal slowdown
Group demand among luxury and upper-upscale hotels slowed during the week of Oct. 27 to Nov 2, which was expected due to Halloween. Absolute group demand of 1.8 million hotel rooms was up 1% compared to last year while down more than 25% from the prior week’s yearly peak (2.4 million). Group ADR was basically flat, up just 0.4%. Across the top 25 markets, New Orleans, Minneapolis, San Diego and Nashville saw strong group demand with occupancy increases ranging from up 4.5 percentage points in Nashville to up 13.3 percentage points in New Orleans. Transient demand among luxury and upper-upscale hotels was healthy, increasing 5.2% while ADR slipped slightly by 0.4%.
All five hotel chain scales experienced RevPAR growth for a fourth consecutive week with the greatest increase in luxury (+9.5%) and the smallest increase in the economy segment (+1.3%). Both occupancy and ADR contributed to the strong RevPAR performance across all chain scales, however occupancy played a more significant role at both ends of the spectrum in luxury and economy hotels.
What’s next for US hotels
After four weeks of rising RevPAR, we expect that the measure will fall in the week ending Nov. 9 due to the U.S. election. A rebound will then follow, lasting up until the week of Thanksgiving, which occurs later this year compared to last.
Global hotels’ sprint continues
Excluding the U.S., global hotel RevPAR advanced 12.1%, the second consecutive week of double-digit growth. ADR grew 7.2%, while occupancy increased almost three percentage points to 67.1%. Following a pattern seen in the U.S., the beginning of the week produced the strongest performance, but unlike the U.S., the subsequent days remained positive with Wednesday and Saturday also seeing double-digit RevPAR gains.
Italy led the top countries in hotel RevPAR growth at 29.7% as all but one of the 16 Italian markets posted gains and most markets earned double-digit increases. Spain, Indonesia, Japan and Mexico also posted double-digit RevPAR growth propelled by ADR while Germany’s strong RevPAR showing was lifted almost entirely by occupancy. Gains across these countries were not limited to a few markets but rather in almost all of them.
Hotel room demand in China rose for a third consecutive week and by the largest amount (+4.7%) over that period, but ADR declined 5%, resulting in a 2.8% retreat in RevPAR. Increasing room demand and declining ADR occurred across most markets in China, including eight of the 10 largest hotel markets based on rooms supply. The two exceptions were Beijing and Guangzhou, where demand was also accompanied by advancing ADR (+0.7% and +2.2%, respectively).
Looking ahead, the final shows of Taylor Swift’s Eras tour will give Canada a boost in Toronto and Vancouver, ending her welcomed contribution this year to the hotel industry and global economy. It remains to been seen if China’s demand growth continues and if it is joined by ADR, which is unlikely given that ADR has fallen in nearly every week this year.
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.