Hoteliers in two top U.S. markets that have weathered the worst of a demand crisis in the past two years finally had something to celebrate.
While no STR-defined market set pandemic-era occupancy records for the week ending April 16, two markets, New York City and San Francisco achieved their second-highest weekly occupancy to date, at 81.3% and 69.3% respectively. This was New York City’s first time in the top 10 for occupancy this year.
U.S. hotel occupancy for April 10-16 dropped 4.4 percentage points, the largest week-over-week decline of the past 14 weeks. However, the decrease was in line with 2019 performance, when the Easter weekend fell at the same point in April. Occupancy for the week was 62% and has been above 60% for the past eight weeks.
The decrease in this week’s U.S. performance is on par for Easter week, even though less of an impact was expected given the high daily Transportation Security Administration screening numbers during the week. Occupancy tends to fall ahead of Easter, and this week was no exception. TSA security screenings were the second highest since the beginning of the pandemic, behind the week ending March 19. In that week, occupancy reached 66.8%, among the highest of the pandemic era, with TSA security screenings just 29,000 higher than this past week.
The most surprising result was the lower decrease in weekday performance, which continues to provide optimism for the recovery of business demand. What is also surprising is how group weekend demand affected total group performance. It’s possible that fewer weddings and the like occurred over the weekend given the confluence of three major religious holidays falling over the same period. Hoteliers should expect performance to dip again in the next week of data, followed by the return of a seasonal climb in the last week of April.
Approximately 72% of the week-over-week demand decline during the week ending April 16 came from the weekend, when occupancy fell 11 percentage points to 65% — the first time below 70% in nine weeks. Another 15% of the weekly demand loss came from Thursday, with less than 10% of the weekly decrease coming from Monday through Wednesday. Average daily rate also fell 2.4%, leading to an 8.8% decline in revenue per available room, which was the second largest week-over-week decline thus far in 2022.
Taking a closer look at how this week compared with 2019, the gap by day parts — weekday, weekend and shoulder — were uneven at best. Most of the week’s gap deterioration occurred on the shoulder days, with the 2019 occupancy index falling by 1.5 points week over week to 96.6. The index for weekdays was nearly flat week over week — down 0.1 points — while the weekend index fell 0.7 points. Even with the small decrease, weekday occupancy was about 10 percentage points lower than what it was in 2019, while the weekend was less than two percentage points away from the 2019 level.
A loss of group demand accounted for 61% of the total demand decrease for the week, with the largest portion of the decline coming on the weekend. Weekday group demand was also down but made up less than a fifth of the total group demand decrease. Transient demand fell the most on the weekend with weekday transient demand increasing.
Like occupancy, ADR fell the most over the weekend — down 3.5% — followed by shoulder days with a 1.9% decline. Weekday ADR was nearly flat (-0.9%) week over week. Overall, the week’s ADR was the fifth highest since the start of the pandemic and 14% higher than what it was in the same week of 2019. Weekly ADR has been above 2019 levels for the past 10 weeks.
Additionally, ADR on an inflation-adjusted basis — or “real” ADR — also surpassed 2019 levels by 1.3%. This was only the fourth time over the past 10 weeks where real ADR was above 2019. Eighty-one of the 166 STR-defined markets surpassed 2019 on a real basis.
Market Highlights
The Florida Keys regained the nation’s top spot in occupancy for the week at 86.3%, followed by New York City. The composition of the top 10 occupancy markets was also different than it has been for most of the year as only two Florida markets — Florida Keys and Miami — were included.
Weekday occupancy was 63.2% and held up relatively well, with occupancy falling by less than a point. New York City; Anaheim/Santa Ana, California; Baltimore; and Bergen/Passaic, New Jersey, reported their highest weekday occupancy since the start of the pandemic. Six other markets, including San Francisco at 75.2% and Washington, D.C., at 65.8%, reported their second highest weekday occupancy since March 2020. Overall, top 25 weekday occupancy was the second highest since the start of the pandemic at 68.7%, up 0.3 percentage points in the week.
Occupancy in central business districts fell by 4.6 percentage points to 65.4%, its largest amount of the year. The largest decrease was in shoulder days — down 6.2 percentage points — and weekend days, which were down 5.7 percentage points. Weekday occupancy fell 2.9 percentage points to 64.2%. This was the fifth consecutive week that weekday occupancy had been above 60% among the central business districts, which is the longest stretch of the pandemic era. Hotels in Atlanta (66.9%), Nashville (82.7%), and the New York Financial District (83.1%) reported their second highest weekday occupancy since March 2020.
Top 25 market ADR declined 1.5%, which was less of a decrease than the rest of the nation, and top 25 market ADR was the third highest of the pandemic era. However, weekday top 25 market ADR was $175, up slightly from the previous week and the highest since March 2020.
Even though actual RevPAR decreased week over week, the index to 2019 rose for a second consecutive week. RevPAR was 8% higher than what it was in 2019. Approximately 73% of markets reported weekly RevPAR above 2019 comparables, but adjusted for inflation that percentage was only 37%. Top 25 RevPAR fell 5.7% week over week with the largest decrease occurring over the weekend, down 12.6%. Weekday top 25 RevPAR increased 0.4% with the week’s RevPAR the highest of the pandemic era at $120.
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.