August U.S. hotel performance looked good, even despite July dipping into negative waters.
In the latest episode of Tell Me More: A Hospitality Data Podcast, STR Vice President of Analytics Isaac Collazo said full-month July hotel revenue per available room fell 0.03%, just edging into negative territory.
The drag-down effect lower-tier hotels continue to have on overall performance is nothing new, Collazo said. While "bifurcation" is still present, he said he's using the word "choppy" more now.
"It just really depends where you are and what type of hotel you have," Collazo said. "It's very choppy."
Performance bright spots in July included top 25 markets such as Minneapolis, where hotel RevPAR rose 16%; New Orleans, which reported hotel RevPAR up 17%; and Houston hotels experienced a 37% RevPAR gain. Overall, hotel group demand continues to appear healthy.
But looking into August, Collazo predicted the extra weekend on this year's calendar will give the month a boost, even if that counts as an artificial boost.
"The composition of the month really matters, and it matters even more when you're in this choppy kind of performance environment," he said.
CoStar National Director of Hospitality Analytics Jan Freitag shared some positive July performance details, calling out average daily rate for groups growing 4% compared to last July, and RevPAR for groups in July was up 6% compared to last year.
"That is very, very healthy performance that, to me looking forward, bodes well for August, September and October," he said.
Freitag also reminded listeners that in a slow and choppy economic environment, the lack of new hotels opening is a help, not a hindrance.
"We're closing more rooms than we open, so room supply continues to be really helpful in this environment," he said.
Also in this episode:
- Freitag outlines how average daily rate in the middle of the week in top 25 markets used to be higher than weekend ADR in those markets, but "that has changed, and quite drastically," he said.
- Collazo digs into occupancy data to show that 64% of hotels in the U.S. have yet to reach their 2019 occupancy levels, which was "more than I thought," he said.
"Occupancy in 2019 was 66.8% [year to date], and at the moment, we're at 63.5%," Collazo said.
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