"Lackluster" is the word that best described U.S. hotel performance in June, and July isn't faring much better, according to speakers on the latest episode of Tell Me More: A Hospitality Data Podcast.
Revenue per available room in the U.S. fell 1.2% in June, "its first significant decline of the year," according to STR Senior Director of Analytics Isaac Collazo.
"It's the largest decrease of the year, and more importantly, the largest since March 2024," he said.
While factors like persistently high inflation, day-of-week shifts and low inbound international travel numbers play big roles in this trend, Collazo reminded listeners that summer hotel performance success cannot rely on leisure business alone.
"When you're trying to create your demand, you get that contract business. You build that foundation, so you can flex your rates," he said. "And I think that business foundation is still missing."
Jan Freitag, CoStar's national director of hospitality analytics, drove that point home with a deep dive into the latest group business demand data, which is, in a word, flat.
"Last year to date, we sold 47.8 million [group room nights], and this year to date 47.8 million," he said. "We're still well below the 50 million group rooms we sold year to date through June of 2019, so I don't like this trajectory. I always want a little bit more growth."
With the traditionally strong group-business months of September and October looming, Freitag said U.S. hotels have a lot of ground to gain.
"This year is not written, but where we are right now, with basically flat group room demand year over year ... that does not bode well for the industry overall because going back to Isaac's argument, you need that base in order, then to layer in the other demand drivers, in order to then have pricing power."
Also in this episode
- Freitag references a Politico article that underscores some of the uncertainty companies are facing and how it's playing out in business travel decisions.
- Collazo compares current levels of hotel occupancy recovery to past downturns.