The global hotel industry had one of its best weeks of 2023, as U.S. hoteliers sold a record 26.2 million room nights for the week of April 16-22.
For the week, hotel occupancy across the U.S. was at 67.2%, the second highest rate of the year; and occupancy outside of the U.S. fared a bit better at 67.7%, according to data from CoStar hospitality analytics firm STR.
Leisure travel remains stable, and group and transient business travel are improving. The top 25 U.S. hotel markets continue to show strong performance while all other markets are normalizing. Average daily rate remains firmly grounded with positive annual gains, although the rate of ADR and revenue-per-available-room growth is moderating and will continue to do so.
In the U.S., group room nights were a major contributor to the week’s room demand gains, accounting for 55% of the week-over-week growth. Group demand among luxury and upper-upscale hotels exceeded 2.2 million room nights, the third highest of the pandemic era. Compared to the same week last year, there were 36.7% more group rooms sold, and group rooms for the week were well ahead of 2019.
US Performance
U.S. hotel industry occupancy for the week was just shy of the 2023 occupancy peak (67.5%), set during the week of March 12-18. Occupancy jumped 3 percentage points from the prior week, which included Easter Sunday, and 1.5 percentage points year over year. That year-over-year comparison is influenced by the fact that last year, the same week included Easter Sunday.
Room demand was the highest for this specific week since daily reporting began in 2000, as 26.2 million room nights were sold in the U.S. That surpassed the previous record, set in 2018, by more than 230,000 room nights.
Average daily rate increased 4.2% year over year to $156 and remained unchanged compared to the previous week. Revenue per available room reached $105, which was up 6.6% year over year and up 5% over the previous week due to the occupancy gain. Both measures were the highest on record for the week, but on an inflation-adjusted basis, real ADR was the eighth best for the week and real RevPAR the sixth highest.
The week-over-week gains in industry room demand were led by the top 25 markets, which accounted for 54% of the week’s growth. Occupancy in the top 25 markets also reached its second highest level of the year at 74.2%, just 1.3 percentage points off the 2023 peak of 75.5%. Top 25 ADR of $189 and RevPAR of $140 showed continued strength, increasing 6.1% and 11.5%, respectively, year over year.
Occupancy in all other markets increased slightly to 63.4%, up 0.5 percentage points week over week. Outside of the top 25 markets, there were also modest increases were in ADR, up 1.8% to $135, and RevPAR, up 2.4% to $84.
Occupancy in the top 25 markets ranged from 82% in New York City to 61% in Detroit. New York had the nation’s highest occupancy among all markets, followed by Charleston and Las Vegas, where occupancy topped 80%. Occupancy was also strong in Orlando, Nashville and six other top 25 markets, surpassing 75%. In all, 20 of the top 25 markets posted weekly occupancy over 70%, the most since mid-October 2022 and only the second time since the start of the pandemic that has happened.
Weekday occupancy reached 74.1%, led by Nashville (81.9%), Washington, D.C. (81.2%), and New York (80.4%). The largest year-over-year gains were in Chicago, where occupancy increased 22 percentage points to 74.6%. Weekly occupancy decreased from a year ago in four of the top 25 markets – Los Angeles, Miami, San Francisco and Tampa.
ADR increased for all top 25 markets except Miami (-18%), San Diego (-0.4%) and Tampa (-4.5%). These three markets also posted RevPAR declines along with Philadelphia (-3.3%) and Phoenix (-0.5%).
Global Performance
Global occupancy, excluding the U.S., reached 67.7%, up 3.1 percentage points from the previous week and almost 14 percentage points ahead of last year. Weekly ADR rose 19.3% year over year to $141, resulting in RevPAR of $96, an increase of more than 44% from last year.
Among the top 10 countries based on supply, occupancy was 71%, which was highest level since the start of the pandemic and up 17 percentage points year over year. The U.K. had the highest occupancy among the top 10 at 79.4% and was followed by Italy at 76.3%. The largest year-over-year occupancy gain was in China, up 30 percentage points to 72.7% but down from its pandemic-era high a week ago (74.2%). Occupancy was also up by more than 17 percentage points in Japan and Germany.
Outside of the 10 countries with the largest supply of hotel rooms, several islands posted occupancy above 75% over the past three weeks, including the Bahamas, Jamaica, Puerto Rico and Curacao; along with two northern European countries, the Netherlands and Ireland.
Isaac Collazo is VP of analytics at STR and 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.