Weekly hotel performance in the U.S. was boosted by groups booking more than 10 rooms a night at luxury and upper-upscale hotels.
The latest data from CoStar and its hospitality analytics division STR shows that for the week ending Sept. 23, group demand at U.S. luxury and upper-upscale hotels was the highest it has been all year. It was also the third-highest level since March 2020. On the weekdays — Monday to Wednesday — group demand was at the second-highest level of the past three years. Demand is calculated from the number of hotel room nights sold.
The week started off slow for U.S. hotels as sundown on Sunday, Sept. 17, marked the end of Rosh Hashanah, when many travelers traditionally stay home.
Continued performance strength on the weekdays, particularly in some of the largest U.S. cities, indicates that business travel and demand for hotels is also climbing back.
Peak fall occupancy in the U.S. is expected to occur in the week ending Oct. 21 or Oct. 28. Thereafter, occupancy will trend down to its annual low point.
Meanwhile, outside of the U.S., global hotel markets continue to post strong year-over-year growth in demand, some of which is coming from the U.S. Double-digit, year-over-year increases in revenue per available room in some markets, however, are expected to moderate as average daily rates normalize.
US Performance
Occupancy for the week rose to 68.5% from 67.7% in the week prior. Compared to last year, occupancy was down 1.1 percentage points. Average daily rate rose by its largest amount of the past 18 weeks, up 2.9% year over year and marking the second consecutive week above 2% growth. While the percentage gain was below the most recent inflation rate of 3.7%, real ADR remained above 2019 for a third consecutive week. Revenue per available room showed a more modest year-over-year gain, up 1.2% given the decrease in occupancy, and unlike ADR, real RevPAR remained below 2019.
Weekend occupancy has fallen for eight consecutive weeks with the largest declines coming from markets outside of the Top 25. Weekday occupancy, at 69.4%, showed no change from the prior week or last year.
Occupancy in the top 25 markets rose week over week from 73% to 74.2% but remained down by nearly a percentage point versus a year ago.
ADR in the top 25 markets increased 2.2% year over year, bookended by New York City’s 16.5% increase and San Francisco’s 33.1% decline. ADR retreated in six of the top 25 markets, including Los Angeles, Anaheim, New Orleans, Orlando and Miami. Strong weekly RevPAR growth, of 10% or more, was posted in six top 25 markets – Boston, Detroit, Houston, Minneapolis, Oahu and Washington, D.C. But those gains were offset by sharp decreases in Miami, Anaheim, Orlando and San Francisco.
New York City led the nation with the week’s highest occupancy of 90.9%, up 0.8 percentage points year over year. It was also the city’s best weekly level going back to the start of 2019. The city’s hotels got a boost from the U.N. General Assembly. New York ADR rose 16.5% year over year to $489, which was also the market’s highest weekly level going back to 2019. New York RevPAR rose by 17.6%.
Weekday occupancy in the top 25 markets ranged from 95.1% in New York to 56.6% in New Orleans, with most above 70%. Seattle also reported weekday occupancy above 90%. Weekend occupancy was 91% in San Diego and above 80% in 10 other markets.
Global Performance
Global hotel occupancy excluding the U.S. grew slightly, up 1.2 percentage points from the prior week to 72.1% and 4.6 percentage points higher than a year ago. ADR also showed solid gains, rising 11.8% to $150, which was the first time above $150 in the past five weeks. RevPAR outside of the U.S. increased 19.3% year over year to $108.
The top 10 countries based on total hotel rooms supply posted strong growth, too, with occupancy up 6.4 percentage points year over year to 74.3%, which was the sixth highest level since March 2020. ADR increased 8.6% year over year to $144, resulting in RevPAR growth of 18.8% to $207, which was $6 lower than the U.S. RevPAR level.
Within the top 10 countries, the United Kingdom posted the highest occupancy at 84.5%, up 3.5 percentage points year over year. Spain was second, with occupancy of 83.9%, a 2.5 percentage-point increase year over year.
In France, occupancy was down 0.8% year over year to 76.6%. The country is currently in the “pool” match stages of the Rugby World Cup with the semifinals and finals coming up in October.
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.