The number of people staying in US hotels every week continues to be lower than last year due to a change in travel – from resorts to the top 25 markets and outbound.
Lodging problems may not be due to the economic boom because air travel, based on TSA inspections, is up about 10% year-over-year and has been up since April on seven moving days.
The number of daily hotel stays in the US is also declining, but this is likely due to a shift in demand from leisure to business, group and leisure travel.
Outside the US, the hotel industry’s pandemic recovery continues.
The US population is expected to increase again this week, to its annual peak, which should occur this year in the week of July 22. The growth of ADR remains stable as the demand mix stabilizes. As a result, revenue per room is expected to be slightly lower than last year. Global employment, excluding the US, is expected to show positive growth in the next few weeks.
US hotel occupancy returned to its Memorial Day holiday peak with 69.4% occupancy, up 7.8 percent from the previous week but down 1.1 percent from the same week in 2022. points – a difference that widened from an average decline of 1.9 percent at the start of this year.
For the seventh week in a row, New York City ranked the nation’s most weekly resident at 87.7%. Note, hotels open to new arrivals are not included in the overall performance calculations.
Eight markets reported occupancy above 80%, including Boston and Seattle. Washington, DC, was below that level with occupancy increasing by more than 4.5 percent year over year.
The largest weekly occupancy gain was on Oahu, where occupancy rose 9.7 percent year-over-year to 84.8 percent.
As has been the case for most of this year, Friday and Saturday saw the biggest drop in occupancy – down 2.5 percent year-on-year. However, in the recent week, Sunday and Thursday also showed a significant decline.
Weekend occupancy was down in 71% of all markets, with eight markets reporting a 10 percent drop.
In the 25 largest markets, weekend occupancy decreased by 3.1. The biggest declines were in Minneapolis and Atlanta, down 11 and 10.6 percent, respectively. Outside of the top 25 markets, weekend occupancy was down 2.2 percent.
At 69.7%, average days (Monday-Wednesday) occupancy was flat compared to last year and the highest level for the year to date. Being in the top 25 during the week reached 74.6% with Boston and New York above 90%. Five other markets – including Denver, Seattle and Washington, DC – reported occupancy within 80%. Midweek stays in Boston and Washington, DC were at their highest level since before the pandemic.
The average weekday occupancy in the central business units reached 77.7%, but the gap in 2019 remained significant as the average weekday occupancy was 87%.
Weekday attendance outside the top 25 was 67.1%, also down from last year.
As expected, the demand for groups between luxury and luxury hotels came back and reached the highest level of the last six weeks. The biggest annual gain in group demand was on Oahu. Nashville, New York City, Philadelphia and Washington, DC, hotels have also placed benefits on group demand.
The weekly high occupancy and high rise jumped above 70%, but the highest occupancy among chain scales was 76%. Mid-range and budget hotels continued to decline, with the latter down 3 percent year-on-year.
For the second week in a row, RevPAR decreased year-on-year, this time by 1.2%, as ADR growth of 0.5% was not enough to overcome the decrease in occupancy. Shoulder days and weekends showed a significant decrease in RevPAR, down by 1.4% and 4.3%, respectively, while the measure increased by 1.6% during the week driven by ADR growth of 1.7%. Adjusted for inflation, real weekly RevPAR was down 5.5% year-over-year and has declined for the past five weeks. Real ADR was also down 3.9%, and has been declining for five consecutive weeks.
Top 25 RevPAR was down 2.4% year over year, while actual RevPAR was down 6.6%. This was only the second time that nominal RevPAR has fallen since the recovery began. All of these declines have occurred this year.
Outside of the top 25 markets, RevPAR was down 0.3% year over year. Real RevPAR decreased by 4.7% year-over-year.
Occupancy worldwide, excluding the US, was 68.5% – the fourth-highest quarter since March 2020 and up 6.5 percent year-on-year. Weekly ADR rose 16.6% year-on-year to $152, the second highest since the pandemic began. With strong growth in occupancy and ADR, RevPAR achieved revenue of $104, up 28.9% year over year.
Living in the top 10 countries, based on income, reached 70.3%, an increase of 8.6% year-on-year. Asia remained the largest contributor to residential acquisitions with China rising by 16.3% year-on-year, followed by a 7.8-percent gain in Japan and Indonesia, up by 6.6 percent.
The United Kingdom also had the highest population among the top 10 countries at 80.8%.
Occupancy in France gained 5.5 percent to 79.5 percent, benefiting from spring bank holidays and summer travel.
Top 10 ADR gained 12.8% for the year to $143. Japan was the biggest ADR gainer, up 81.2%, while China, Indonesia, and Germany posted annual growth of more than 20%.
RevPAR in the top 10 rose 28.5% to $100. RevPAR in Japan rose 104.5% year-on-year, while China rose 66.1%. Mexico was the only country in the top 10 to post a decline in RevPAR, down 8.9%.
Isaac Collazo is vice president of analytics at STR. William Anns is an expert on STR
This article represents an interpretation of data collected by CoStar Hospitality analytics company, STR. Please feel free to contact the editor with any questions or concerns. For more information on STR data, visit the data information blog at STR.com.
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