Two years after hotel demand fell off a cliff in the U.S. as COVID-19 was declared a pandemic, hoteliers in every class and market around the country have got a grip on the greatest comeback in the industry's history.
The proof is in the performance data.
The latest monthly data from STR, CoStar's hospitality analytics firm, shows a 75% year-over-year improvement in U.S. hotel industry revenue per available room for February. That key performance metric is still down compared to pre-pandemic 2019 levels but only by 2%, said Jan Freitag, national director of hospitality at CoStar, in a monthly video analysis of the data.
RevPAR is being driven largely by rates, as U.S. hotel occupancy compared to 2019 was down 8.2% in February but rates were up 7%.
The recovery is also not evenly distributed across the industry.
"Class performance continues to tell three distinct recovery stories," he said. "Limited-service and economy hotels show RevPAR that has improved, mostly by holding on to occupancy during the last two years and now increasing rates."
With occupancy on average 19% below 2019 levels, luxury hotels "are realizing unprecedented pricing power," Freitag continued. "Luxury class ADR in February was 30% higher than it was two years ago. And, lastly, upper-upscale hotels are still struggling as return-to-office plans get changed and business travel is only just now starting up in earnest."
For more of Freitag's insights on the latest U.S. hotel industry performance trends and transactions, watch the video above.