The conclusion of the college basketball season and the total solar eclipse sent U.S. hoteliers to the moon at the start of the week, but hotel performance declines in the back half of the week brought hoteliers back to earth.
Like in the previous week — March 31 to April 6 — U.S. hotel performance for the week of April 7 to April 13 reflected an easy comparison to Easter last year and showed the vast impact of the solar eclipse on April 8. Revenue per available room rose 5.8%, driven by nearly equal gains in occupancy and average daily rate. However, the growth was not equally distributed across all days of the week.
Hotel RevPAR gains came primarily from Sunday and Monday, which were up 42.3% and 23%, respectively. Thereafter, growth tapered to 8.3% on Tuesday and 2% on Wednesday. What’s more concerning is RevPAR decreased from Thursday through Saturday.
The impact of the solar eclipse cannot be understated. Despite only 17% of U.S. hotel submarkets — 120 of 687 U.S. submarkets — being in the path of the eclipse, those submarkets accounted for 59% of the total U.S. demand growth. Most of the increase came on Sunday and Monday.
Occupancy on Sunday and Monday surpassed 80% in the luxury/upper upscale and upscale/upper midscale classes, and was near 70% in the midscale/economy classes. In the remaining submarkets, occupancy hit 61% in luxury/upper upscale, 58% upscale/upper midscale and 50% in midscale/economy.
Eclipse submarket two-day ADR was $295 in luxury/upper upscale, $195 in upscale/upper midscale and $115 in midscale/economy. ADR was even higher on Sunday, the day before the eclipse. The performance seen with the eclipse adds validity to the idea that the U.S. hotel industry has transitioned from “revenge” to “selective” travel. For an in-depth analysis of the eclipse and comparisons to the 2017 eclipse, visit STR’s data insights blog.
While it is true that year-over-year comparisons were easy due to Easter 2023, the growth in non-eclipse areas was not that impressive. Weekly RevPAR was up by only 1.8%, with Sunday and Monday growing in the low teens. In the eclipse markets, weekly RevPAR increased 35.9%. All areas of the country saw RevPAR decrease Thursday through Saturday.
Market Highlights and Notable Events
Occupancy was robust in most of the top 25 U.S. hotel markets, led by Las Vegas (86.6%) and New York City (82.7%). Many others were above 70%, including Los Angeles; Nashville, Tennessee; and Washington, D.C.
Weekly RevPAR growth was highest in Philadelphia at 45.7%. Philadelphia hotels saw double-digit RevPAR gains every day starting with Sunday up 180% as WrestleMania 40 concluded. Dallas had the second highest weekly RevPAR gain among the top 25 markets at 38.9%, propelled by the eclipse. Phoenix also had a good week as it hosted the NCAA men’s basketball Final Four, resulting in RevPAR rising by 129% on Sunday, 78.5% on Monday and finishing the week up 19.9% with occupancy near 80%.
Outside the top 25 markets, Cleveland hosted the NCAA women’s basketball championship game and saw RevPAR rise by 519% on Sunday. Cleveland was also in the eclipse path, which drove performance exponentially with weekly RevPAR up 85.1% on an occupancy level of 72.1%.
Elsewhere, The Masters Tournament in Augusta, Georgia, resulted in the nation’s largest RevPAR gain for the week, which was up 389.6%.
Much has been written about the weaker ticket sales for the annual Coachella Music and Arts Festival in Indio, California, near Palm Springs. Hotel data showed the results as occupancy was down 5.7 percentage points on Friday and Saturday, the first two days of the festival. ADR also fell 9.7%. Coachella’s second weekend is April 19-21 and will likely also see decreases, as the festival had not sold out at the time of writing this analysis.
Group Demand Shines
Hotel group demand in the U.S. continues to be strong, reaching the second-highest demand level of the year so far. Including the most recent week, group demand has surpassed 2 million room nights four times this year. San Diego, Philadelphia, and Nashville saw the greatest group occupancy gains. Group ADR increased a healthy 9.1%, with Philadelphia and Phoenix seeing the largest ADR gains at more than 20%.
US Hotel Outlook
As stated, the eclipse drove U.S. hotel performance during the week in addition to the easy year-over-year comparisons. Next week’s data should be more normal. Later in the month, U.S. hotels will see a pause in group demand due to the Passover observance from April 22-30.
Last year’s Taylor Swift Eras Tour from mid-March through August will also create a performance hole for U.S. hotels, resulting in softness in those markets that benefited from it in 2023. Various indicators such as rising debt, delinquencies and inflation continue to point to slower leisure travel this year. It’s likely that special events will drive travel, but travelers will be more selective than they were a year ago.
Global Hotel Performance Takeaways
Global occupancy reached the highest level of the year at 68.4%. Key country occupancy ranged from 76.4% in the United Kingdom to 59.3% in Indonesia. Spain, Italy and China all saw occupancy above 72%, with only China showing a year-over-year decrease.
Canada benefited from the eclipse with RevPAR rising by 16.9%. The eclipse was visible in two of Canada’s largest cities: Montreal’s RevPAR was up 34.4%, while Toronto saw a 27.6% gain.
Mexico, however, did not see a notable increase country-wide although it was also in the path of the eclipse. However, the northern Mexican markets posted notable RevPAR gains that were offset by RevPAR declines in other parts of the country.
In the months ahead, the 2024 Paris Olympics, rising international travel and Taylor Swift’s tour bodes well for European markets.
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.