The latest weekly U.S. and global hotel performance results point to a return to normal patterns.
Graduations, concerts and sporting events are driving market-level performance while leisure travel in general remains strong.
Hotel room demand from groups is slowing as spring convention season wanes. Business or corporate travel is improving, as evidenced by continuing gains in weekday occupancy.
Average daily rate remains firmly grounded with positive annual gains, although the rate of ADR and revenue per available room growth is moderating and will continue to do so.
US Performance
U.S. hotel industry occupancy for the week of May 14-20 was 67.5%, which tied the high-water mark of 2023 thus far, which was reached in the week of March 12-18. Occupancy increased 2.4 percentage points from the previous week. Compared to the same week last year, occupancy dropped 1 percentage point. Most of this decline was due to the Mother’s Day calendar shift.
Sunday occupancy was 6.4 percentage points lower than the non-Mother’s Day Sunday last year. There was also some softness on the weekend, with occupancy down 0.6 percentage points compared to last year. Midweek occupancy increased slightly compared to last year, up 0.7 percentage points. Wednesday occupancy was up 1.2 percentage points from the same week last year to 69.8%, the highest occupancy level of any Wednesday this year.
Average daily rate at $159 was $3.53 higher than the prior week and a 3.6% increase year over year. The increase was just behind the most recent CPI-indexed annual inflation rate of 5%.
Increasing occupancy and ADR netted a healthy revenue per available room increase of $6.17 week over week to $107, a 2.2% gain year over year. RevPAR and ADR for the week was the second highest of the year, behind the week ending March 16.
The U.S. top 25 markets finished the week at 73.3% occupancy, up 2.6 percentage points from the week prior. In markets outside of the top 25, occupancy was up 2.4 percentage points week over week to 64.4%. Top 25 occupancy has been above 70% for the past five weeks.
ADR in the top 25 markets increased 4.3% week over week to $195 while all other markets experienced a smaller increase, up 0.7% to $137.
Monday to Wednesday occupancy in the top 25 markets increased 0.8 percentage points week over week to 73.3%, while Fridayand Saturday occupancy increased 8.9 percentage points to 81.8%.
Among the top 25 markets, four surpassed 80% occupancy, all increasing more than 4 percentage points from the previous week.
New York occupancy for the week was 89.5%, its highest occupancy of the year to date, leading the top 25 markets for the seventh-straight week and the nation for a fourth week. Columbia University and NYU graduations, among many other events, affected hotel performance. Long Island and nearby New Jersey markets also reached record occupancy levels for the year.
Also achieving year-to-date top occupancy levels were:
- Washington, D.C., at 83.2% as the market hosted graduations at Georgetown and George Washington universities.
- Boston at 82.2%, which was affected by college graduations, notably Boston University, and the Taylor Swift tour that took place in Foxborough, Massachusetts.
- Two additional top 25 markets in Denver and Seattle.
Group bookings at luxury and upper-upscale hotels are settling into the end of conference season patterns. Demand increased 3.1% week over week and declined 3.3% year over year. Transient bookings at luxury and upper-upscale hotels increased 3.5% from the prior week and were 2.6% above last year’s levels.
Global Performance
Global occupancy, excluding the U.S., was 68.8% for the week, up 7.3 percentage points from the comparable week last year. It has indexed at 97% of 2019 values for past six weeks. If occupancy continues at this pace and follows 2019, it will trend up until mid-August. Weekly ADR rose 18% year over year to $142 with RevPAR up 32% to $98.
The top 10 countries based on hotel supply achieved 71.5% occupancy, an increase of 2.2 percentage points week over week and 10.1 percentage points year over year. ADR was up 15.4% with RevPAR increasing 34% to $97, its highest level since the start of the pandemic.
Country highlights include:
- The U.K. led with occupancy of 82.5%, its second highest this year and ahead of the comparable week in 2022 by 10.1 percentage points.
- As France hosted big concerts including Metallica and Bruce Springsteen and one of the major European medical conferences EuroPCR, hotel ADR increased 27% from the previous week to $310.
- China’s hotel industry continues to post the greatest year-over-year gains in occupancy, up 22.5 percentage points.
Outside of the top 10 countries, Ireland had the world’s highest occupancy this week at 88.7%, followed by Singapore at 82.6%.
Chris Klauda is senior director of market insights at STR. William Anns is a research analyst at STR. Isaac Collazo is VP 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. For more analysis of STR data, visit the data insights blog on STR.com.