U.S. hotel demand dipped slightly week to week in the latest data from CoStar Group’s hospitality analytics firm STR, but the hotel industry continued to perform at pandemic-era-high levels.

For the second straight week, according to data reported in standard STR methodology, the U.S. hotel industry sold more than 21 million rooms — a level not reached since before COVID-19 was declared a pandemic in March 2020. However, U.S. hotel demand for the week ending March 27 was down 350,000 rooms from the previous week — equivalent to each U.S. hotel on average selling 10 fewer rooms.

According to STR’s “Market Recovery Monitor,” which benchmarks the latest weekly performance against the comparable week in 2019, demand for the week of March 27 was 83% of the level reached during the comparable week in 2019.

Hotel average daily rate for the week of March 27 was 82% of 2019 levels — the highest index of the past 29 weeks.

The “Market Recovery Monitor” places the industry and its markets into one of four categories, based on ratios achieved by dividing current RevPAR performance against performance in the comparable week in 2019:

• Depression: Markets with an index of 50 or below against the benchmark;
• Recession: Markets with an index of between 50 and 79.9;
• Recovery: Markets with an index of between 80 and 99.9; and
• Peak: Markets with an index of 100 or higher.

Ratios of 100 or more outperformed the benchmark, and below 100 underperformed.

For the week of March 27, the U.S. hotel industry remained in the recession category, though at the second-highest index of the pandemic era — behind only the week of March 20.

A higher percentage of hotels were classified as in recovery, as the number of hotels in the depression category was the lowest since the start of the pandemic.

Versus the previous week, hotel occupancy was down 1.1.% for the week to 57.9%, and was weakest on Wednesday and Thursday but still strong over the weekend at 71.1%. U.S. hotels were 73.4% occupied on Saturday — the third-highest daily occupancy reached in the past 15 months.

At the state level, more hotel markets reported demand declines than demand growth from the prior week. Hotel markets in Florida and Texas, which led performance gains over the past two weeks, were responsible for more than 57% of the loss in demand for the week among those losing demand.

Still, the highest weekly occupancy was achieved by hotels in Key West, and Florida again comprised nine of the top 10 highest occupancy markets in the U.S. with most at 80% or more for the week.

In Texas, the San Antonio hotel market experienced the greatest week-over-week decline in demand — selling 55,200 fewer room nights than the prior week — after a six-week turnaround in hotel performance that was unrivaled by any other market. Occupancy in the San Antonio market was down more than 16 percentage points from the week of March 20. That slowing of demand in San Antonio is reflective of fewer teams in town as the NCAA Division I Women's Basketball Tournament progressed to later rounds.

The decline in hotel occupancy, though widespread across the industry, was less-pronounced in the U.S. Top 25 markets, where hotels also were able to grow ADR as rates dropped in all other markets combined.

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.