The pace of U.S. hotel industry performance growth continues to slow as demand patterns moderate. Meanwhile, excluding the U.S., global hotel occupancy reached its highest level of the year and since March 2020, according to the latest weekly results from CoStar hospitality analytics firm STR.

Summer leisure travel is expected to drive hotel performance in the U.S. over the next three months, but the data also suggests continued pickup in the demand segments and markets that have been slower to bounce back from the pandemic.

That’s true of global markets, outside the U.S., where travel has been restricted, particularly to and from Asian countries. It’s also true of a rise in business travel, which is indicated in weekday occupancy trends.

Outside of the U.S., global markets achieved 70.3% occupancy for the week ending May 27. Combined with a 15% year-over-year hike in average daily rate, these markets achieved RevPAR of $103, up 30% year over year and the first time it has surpassed $100.

Weekly U.S. hotel industry occupancy was 66.8%, up just 0.4 percentage points from the same week in 2022 and down 0.7 percentage points from the previous week.

Trends indicate stronger midweek occupancy and softer weekend occupancy compared to last year.

• Weekday (Monday-Wednesday) occupancy increased 2 percentage points to 65.8% year over year, the sixth weekly consecutive gain.
• Weekend (Friday-Saturday) occupancy was 76.6%, down 1.5 percentage points year over year, following a pattern of declines in five of the past six weeks.
• Shoulder (Sunday and Thursday) occupancy was 58.4%, essentially unchanged compared to last year.

ADR increased 2.2% year over year to $157, but declined 1.2% week on week. The softness in weekly ADR is due in part to the change in the day of week mix. Midweek and shoulder period ADR is historically lower than weekend ADR, so the higher midweek demand relative to the weekend demand affects ADR. Additionally, when adjusted for inflation, ADR and RevPAR are in arrears to 2019 and below last year’s levels. RevPAR increased 2.9% year over year to $105.

The top 25 hotel markets achieved weekly occupancy of 72.3%, marking the sixth week above 70% but a 1-percentage-point decline from the previous week. Top 25 ADR increased 2.7% year over year to $186, while all other markets experienced a slightly smaller increase, up 1.7% to $139.

New York City topped the chart at 85.7% occupancy, ranking first among the top 25 markets for the eighth straight week and leading the nation for a fifth week. In addition to strong leisure demand, the Lightfair International architectural expo boosted performance, along with the Taylor Swift tour taking place in nearby New Jersey. This notable tour sweeping the country had an even greater impact on the New Jersey markets with Newark hotels achieving their highest weekly occupancy since the start of the pandemic.

Three other top 25 markets achieved occupancy greater than 80%: Boston at 83.2%, Las Vegas at 81.2% and Oahu at 80.1%.

In the top 10 countries based on supply, occupancy reached 72.4%, also its highest level since the start of the pandemic and more than 10 percentage points higher than the comparable week last year. The gain in occupancy was largely driven by China and Japan, with year-over-year gains of 22.4 percentage points and 12.5 percentage points, respectively.

Top 10 ADR increased 14% year over year with RevPAR up 33.5%. RevPAR in China topped 116% with Japan closely behind at a 93% premium over 2022. The U.K. continued to lead the group in occupancy at 82.6%, followed by Italy at 81.5%.

Outside of the top 10 countries, Ireland had the world’s highest occupancy at 88.5%, followed by Bermuda at 80.9%.

Chris Klauda is senior director of market insights at STR. William Anns is an analyst at STR. Isaac Collazo is vice president of 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.

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