The week that included the Memorial Day holiday was all about occupancy for U.S. hotel performance.
Over the week of Memorial Day through June 1, U.S. hotels showed a modest 1% increase in revenue per available room, all from occupancy, as average daily rate was essentially unchanged and up just 0.1%. The top 25 markets amplified this pattern with occupancy increasing 1.6 percentage points year over year, while ADR for those markets decreased 0.5%, netting RevPAR growth of 2%.
By day of week, U.S. hotel RevPAR showed robust growth on Tuesday — up 5.9% — and Wednesday, which was up 4.8%. Hotel occupancy led the gain, but ADR was also on the rise as it increased 2.1% in each of the two days. Over the last four weeks, weekday RevPAR from Monday to Wednesday has grown by 6.9% nationwide and 10.4% in the top 25 markets. However, as seen in many weeks this year, weekend RevPAR fell by more than 1.7%, mostly due to a drop in occupancy.
U.S. hotel occupancy over the three-day Memorial Day weekend from Friday, May 24 to Sunday, May 26 was 72.5%, almost identical to Memorial Day weekend last year at 72%. Like last year, holiday weekend ADR declined by 0.2% in 2024 and by 0.5% in 2023. The top 25 U.S. hotel markets saw slightly stronger Memorial Day weekend occupancy — up 1 percentage point — compared to last year with a pronounced ADR decline of 0.8%.
Occupancy Drove Performance
Upper-upscale hotel chains saw the largest RevPAR gain at 2.2%, a result of occupancy increasing 1.5 percentage points as ADR decreased slightly. Luxury RevPAR was the next highest at 1.9% on solid gains in occupancy — up 3.6 percentage points — but with a sharp decrease in ADR, which fell 4%. Occupancy growth in the luxury segment has been particularly strong for the past four weeks. Approximately 54% of U.S. hotel markets have seen luxury hotel occupancy increase by more than three percentage points during that time, while rates have fallen or remained flat. Of the 478 U.S. luxury hotels that were operating both this week and the same week last year, 61% saw ADR fall, with more than a quarter seeing decreases of 10% or more.
Upscale and upper-midscale hotels also posted positive RevPAR comparisons for the week, up 1.3% and 0.5%, respectively, and both segments grew their RevPAR based on occupancy. The midscale and economy segments saw continued RevPAR decreases with the decline in economy hotels nearing 4%.
The three-day Memorial Day weekend followed the same occupancy-led performance stated above. However, only luxury and upper-upscale hotels saw RevPAR advance with all others declining due mainly to falling ADR.
A Pause in Group Demand
Group demand among the luxury and upper-upscale class hotels took a step back, declining 2.7% following four weeks of robust growth, but ADR remained strong and rose 5.3%. The top 25 markets saw a greater decline in occupancy and a smaller increase in ADR compared to the rest of the country. The latter has seen strong group performance over the past two weeks, perhaps influenced by more leisure-oriented groups such as weddings, graduation celebrations and other family-oriented events.
Storms Affected Performance Across South Central Markets
Markets that saw some of the highest RevPAR increases this past week were also those affected by severe storms, flooding and tornadoes. Dallas and Houston experienced double-digit RevPAR gains with the largest increases during midweek as the storms moved though the areas.
New Orleans recorded the third highest RevPAR increase across all U.S. markets. Of the country’s four largest markets, Las Vegas and New York City saw RevPAR gains of 8.8% and 4.8%, respectively. Las Vegas’ RevPAR gain was driven by ADR, which rose 7.4%, and New York’s hotel RevPAR was boosted by occupancy, which jumped 3 percentage points. Orlando and Chicago experienced RevPAR declines of 2.8% and 3.4%, respectively, with Orlando hotels hurt by both ADR (-1.1%) and occupancy (-1.1 percentage points) decreases. Chicago recorded an ADR decrease of 3.4%, whereas occupancy increased 1 percentage point.
Predictions for May’s Monthly Data, and What To Expect from July Fourth
Data from the month of May is expected to yield positive results for the industry with RevPAR estimated to increase 4.2% due to ADR up 2.7% and occupancy up 1 percentage point. The inclusion of an extra Friday this month provided a small boost to performance as Friday is historically a stronger performing day of the week. The last week in June looks to be strong based on Forward STAR bookings. The week of July Fourth is affected by the shift in the holiday from Tuesday last year to Thursday this year. This shift should favor travelers getting an early start on the weekend.
For the rest of the summer, we will be watching performance carefully. Inflation and declining savings are having a compounded impact on middle- and lower-income travelers, likely resulting in reduced and trade-down on travel. At the same time, TSA screenings at airports continue to reach record levels, which is partially a result of Americans traveling internationally at a greater rate than international travelers visiting the U.S.
Spain Tops Global Performance Thanks to Taylor Swift
Outside of the U.S., Spain led the key hotel markets as RevPAR increased 22.5%. Taylor Swift’s concerts in Madrid on May 29-30 helped propel weekly results in the city, with occupancy rising 9.1 percentage points to 86.5% and ADR increasing 38%. Spain has seen significant ADR increases, averaging 10.3% for the year so far, while occupancy has been 3.5 percentage points higher than last year on average.
Germany also posted a RevPAR gain of 21.8%, mostly attributable to the calendar shifts of holidays and trade fairs. In the most recent week, Dusseldorf hosted Drupa, a printing technology trade fair that attracted 260,000 visitors. Occupancy in Dusseldorf increased 4.8 percentage points to 67.6%. As compared to 2018, the last time the trade fair was in the city, occupancy was down 1 percentage point.
Performance in the U.K. was mixed as the week included school holidays for most of the country. ADR increased 2.2%, while occupancy fell 0.7 percentage points to 80.3%. London occupancy was down 2 percentage points to 79.3%, while the rest of the U.K. saw a smaller decline, down 0.3 percentage points to 80.6%. With an election date set for July 4, performance across regional U.K. hotel markets will likely increase in the weeks ahead as members of Parliament make their way around the country.
Isaac Collazo is vice president of analytics at STR. Chris Klauda is senior director of market insights at STR. William Anns is a research analyst 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.