Las Vegas’ first Super Bowl this weekend is anticipated to be the best ever for hotels in a city hosting the NFL’s Big Game. But last week was a calm before the storm for the Vegas hotel market, and that was felt across the U.S. hotel industry.
In the week ending Feb. 3, CoStar performance data shows Las Vegas hotel revenue per available room was down 9.3% year over year. The previous week, that metric was up 88.6% from the same week in 2023, driven by demand from large conventions in the market.
The largest U.S. hotel market by room count, Las Vegas performance weighed heavily on total U.S. and especially top 25 market results.
Week to week, hotel occupancy in the top 25 markets was down 3.1 percentage points. Compared to last year, occupancy was up less than a percentage point. With average daily rate increasing just below the annual rate of inflation, top 25 RevPAR was up 4.3%.
Excluding Las Vegas, top 25 RevPAR advanced 6.5% year over year, driven by 3.8% growth in ADR and an occupancy boost of 1.6 percentage points. Weekdays were especially strong in the top 25 markets, with RevPAR up 11.3% on strong ADR (+5.3%) and occupancy (+3.5 percentage points), excluding Las Vegas.
This week, the Las Vegas market is expected to have the opposite effect. Hotels rates for the Super Bowl are forecast to be the highest ever, which will propel Las Vegas performance and affect the overall U.S., especially the luxury segment.
US Performance
U.S. hotels took an expected seasonal pause with occupancy 1 percentage point lower compared to the prior week and flat from a year ago. This bridge week between January and February historically has produced a week-over-week decline.
Even with the decrease, average daily rate continued to grow, up 1.9% year over year, resulting in a RevPAR gain of 1.7%.
Seven of the top 25 markets posted double-digit RevPAR increases, including Seattle (+27.5%), Boston (+17.9%) and Washington, D.C. (+17%). Oahu, New York City, Orlando and Miami rounded out the list.
Outside of the top 25 markets, RevPAR declined 0.5%, and it has every week of the year so far and in 28 of the past 30 weeks. The decreases continued to be focused in economy-class hotels with lesser contribution from midscale-class hotels. RevPAR grew by more than 20% year over year in Baltimore; Jackson, Mississippi; San Jose/Santa Cruz, California; and Knoxville, Tennessee.
Hotel demand from groups grew for the fourth straight week in the luxury and upper-upscale segments, up 10% compared to the same week last year and up 7.2% over the past four weeks. Group ADR has also increased, up 2.3% year over year and 6.4% over the past four weeks.
Seventeen of the top 25 markets posted year-over-year group occupancy gains.
Global Hotel Performance
For the second straight week, the United Kingdom's hotel industry posted the highest occupancy — 68.4% — across the top 10 countries outside of the U.S. Occupancy in the U.K. was up 1.8 percentage points year over year. If historical patterns continue, the U.K should see improving occupancy over the next three weeks. ADR also continued to grow, up 3.2% year over year to $122 and resulting in a RevPAR gain of 6.1%.
Following on the heels of China‘s strong performance in the past few weeks, Indonesia’s hotels posted a RevPAR increase of 23% year over year. Occupancy for the week was 60.9%, 4.3 percentage points ahead of 2023; and ADR advanced 14.4% to $65. While there is not a large Chinese population in Indonesia, Chinese New Year celebrations are expected across the country, driving additional growth in the coming weeks.
Italy’s hotels continue to post strong performance gains with some of the growth coming from inbound travel from Americans, which was up 35% versus 2022 and up 15% compared to 2019, according to U.S. International Trade Administration data. This week, occupancy increased 2.4 percentage points to 58%, with ADR up 11.6% year over year to $158. Over the next 90 days, the key cities of Rome and Milan show some of the highest average gains in occupancy on the books versus the same time last year, up 4.7% and 7%, respectively.
Spain’s hotel industry posted the largest occupancy growth of the top 10 countries, up 6.2 percentage points year over year to 65.8%, due to events in Barcelona and Madrid. ADR increased 11.1%, and RevPAR was up 22.6% against the comparable week in 2023.
Overall, eight out the top 10 countries posted year-over-year occupancy gains, and nine had RevPAR gains. Six of the 10 reported double-digit RevPAR growth, led by Japan (+29.5%).
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.