All of the hallmarks of a strong fall travel season in the U.S. are on display in the latest weekly hotel performance data.
Groups traveling for events and conferences are driving gains in occupancy and revenue in the nation’s biggest hotel markets. And particularly in some southern U.S. markets, the return of college football is giving a boost to hotel revenues.
“Revenge travel” coming out of pandemic lockdowns was still a factor at this time in 2022, but much of that in 2023 is being directed at markets overseas, leading to some weaker year-over-year comparisons in the U.S.
During the week of Labor Day, U.S. hotel occupancy declined 1.2 percentage points year over year to 60.3%, the latest data from CoStar hospitality analytics firm STR shows. Compared to the same week in 2019, however, the difference was only half a percentage point, marking the fifth week this year in which occupancy was within one percentage point of the pre-pandemic level.
U.S. hotel average daily rate increased 1.8% year over year to $151, which with the occupancy decline wasn’t enough to lift revenue per available room, down 0.1% from the same week in 2022. ADR gains have been hovering below 2% for the last four weeks, which can be attributed to a change in the guest mix to favor more business and group travel over leisure.
For a second consecutive week, New York City had the nation’s highest occupancy at 88.6%, boosted by the U.S. Open, Fashion Week and The Armory Show, an international art show. New York ADR and RevPAR increased 11.5% and 15.1%, respectively. The strongest performance was over the weekend, with occupancy at 94.8% and RevPAR up 15.7%.
Oahu was the only other market across the country to record occupancy above 80%, increasing 4.5 percentage points to 80.6%. ADR in the market was up 2.4%, pushing RevPAR up 8.5%.
Denver was also a big winner as RevPAR increased 21.4%, led by a 12.5% ADR gain and a 5.6% occupancy gain. Denver’s performance drivers include the CEDIA Expo and a solid college football weekend.
Other markets benefited from college football over the weekend, most notably three southern areas: Alabama North (Tuscaloosa); Missouri North (Columbia); and Birmingham, Alabama. Each posted weekend RevPAR increases more than 50%.
Group demand among luxury and upper-upscale hotels declined 3% compared to the same week last year, but increased 5.9% compared to last week, which is in line with expectations for growing group demand.
Global Performance
Reflecting normal seasonal patterns, global hotel occupancy excluding the U.S. increased 3.5 percentage points week over week to 68.4%, following a decline last week. Year over year, occupancy continued to increase, up 5.4 percentage points. ADR increased 10.4% to $148, resulting in a 19.9% gain in RevPAR to $101.
Occupancy for the top 10 countries, based on supply, rose 3.4 percentage points week over week to 68.7%, and was up 7.3% year over year. ADR rose 5.2% year over year to $138, and RevPAR increased 17.5% to $96.
Of the top 10 countries, Asian countries experienced the largest occupancy gains. Year-over-year hotel occupancy growth was 8 percentage points or better in China, Indonesia and Japan, where RevPAR gains exceeded 50% for the same period. The United Kingdom maintained the top occupancy position at 81.3%, though that was less than a percentage point above the occupancy level for the same week last year. Occupancy was down from the same week last year in both Italy and France.
For more insights into weekly hotel performance in the U.S. and across the globe, visit the data insights blog on STR.com.
Chris Klauda is senior director of market insights at STR. Isaac Collazo is vice president of analytics 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.