Unfortunately, U.S. hotel revenue per available room fell again in the week of Sept. 14-20, and the 1.4% decline was only slightly less than the previous week. Hotel occupancy once again drove the decline, falling 0.7 percentage points, although average daily rate also dipped 0.3%.
U.S. hotel RevPAR has fallen year over year in 16 of the 20 days processed for September and in 100 of the last 143 days from May 1 to Sept. 20. Like this week, the primary culprit has been occupancy, which has fallen 118 days since May 1. ADR has been a bit more resilient, declining 60 times since May, but that’s relative since it has only surpassed 1% growth 40 times during this period and has only surpassed the rate of inflation (~2.7%) five times in 143 days.
Houston affecting top 25 markets and national RevPAR change
No surprise, but the top 25 U.S. hotel markets were again largely responsible for the RevPAR decrease, retreating 2.8% as the remainder of hotel markets across the country were collectively flat. Different from past weeks, Houston (-20.1%) did not represent the largest top 25 RevPAR decrease; that spot was held by New Orleans, where hotel RevPAR fell 22.4%. While Houston didn’t report the largest top 25 decline, its size still had a notable impact on the top 25 aggregate, accounting for 50 basis points of the top 25 decrease and 30 basis points of the national drop.
Other top 25 markets seeing a significant RevPAR decline included Oahu, Miami and Washington, D.C., where RevPAR fell by more than 10% during the week.
For New Orleans, the story was a weekend RevPAR fall (-41.5%) due to 2024 football comp whereas the other down markets saw their declines on weekdays. Weakening occupancy was mostly responsible for all the large top 25 RevPAR decreases. However, ADR also decreased in both day types among those markets.
New Orleans wasn’t the only top 25 market to see a significant weekend decrease. Boston, Dallas, Orlando, San Diego and four other hotel markets saw weekend RevPAR fall by more than 10%. Top 25 weekend RevPAR has decreased in each of the past four weeks, and the most recent week’s drop was the largest of the four. The decrease in top 25 weekend RevPAR accounted for 80 basis points of the national weekly RevPAR decline.
After seeing RevPAR gains in the prior two weeks – and in most weeks of this year – San Francisco hotels had an off week with RevPAR falling 7.2% on an 11.5% ADR decrease as occupancy increased for a third consecutive week to 86.7%. San Francisco tied New York City for the nation’s highest hotel occupancy in the week. Altogether, 10 markets saw weekly occupancy top 80%, including Boston, Denver, Seattle and Louisville.
Outside of the top 25 markets, the Louisiana North market posted the highest RevPAR gain of any market (+22.5%) on strong occupancy gains. The largest hotel cities in the market are Shreveport, Bossier City, and Alexandria. Bossier City and Alexandria saw double-digit occupancy gains during the week that continued into the weekend. Nearly all cities in the market had strong occupancy growth during the entire week. Overall, the market has seen strong RevPAR growth since the end of May.
Buffalo was also a big winner – RevPAR rose 21.7% – on strong gains Wednesday and Thursday due to a Thursday night NFL game.
The annual movement of college football games also affected many markets with RevPAR falling 45.5% in Columbia, South Carolina, this week after a similar gain in the prior week.
Among all U.S. hotel markets, 87 saw RevPAR fall for the week as compared to 93 in the prior week. Most of those saw RevPAR fall by less than 2%.
No change in class trend
The trend by hotel class was unchanged as RevPAR in luxury hotels was up 1.3% and down for all others with the sharpest decrease in economy (-5%). Weekday RevPAR was better for most hotel classes. Weekend RevPAR was down for all hotel types, including luxury.
Group demand in luxury and upper-upscale hotels was down again for an 11th consecutive week, but the decline was the smallest so far (-1.2%). Large weekday group gains were seen in several key markets, including Denver, New Orleans, San Diego, and San Francisco. Group ADR was also up again, but the 1.8% gain was the smallest of the past five weeks.
US short-term outlook not favorable
As we feared, U.S. hotel RevPAR failed to rebound even though the week had no significant comparable challenges. The next two weeks will be more challenging given the annual occurrence of two key Jewish observances: Rosh Hashanah and Yom Kippur. Additionally, the hotels in the southeast U.S. will begin to see difficult comps to last year’s Hurricane Helene.
While September month-to-date RevPAR still shows a 0.8% gain for U.S. hotels, we don’t expect the month to end on a positive basis. The only reason it is positive is due to a calendar shift from last year; we lost a Sunday and gained a Saturday in the first 20 days of the month. On a day-matched basis, U.S. September RevPAR is down 1.3%.
Global ADR slowed, but RevPAR continued to grow
Weekly global same-store hotel RevPAR excluding the U.S. increased 5.6% from Sept. 14-20, which was slightly less than a week ago. Unlike the prior week, the week’s gain was driven almost entirely by occupancy growth as ADR rose just 1%.
China was mostly responsible for the slowdown in global same-store hotel ADR. Excluding China, ADR was up 3.8%.
China’s lower ADR growth was due to last year’s Mid-Autumn Festival, which was celebrated on Tuesday, Sept. 17, 2024. The country’s ADR declined Sunday through Tuesday this year, increasing thereafter. Occupancy rebounded strongly, up 9.9 percentage points this year against the easy comp from last year. Overall, weekly RevPAR in China was up 13.1%.
Also contributing to the slower global ADR growth was Singapore, where the measure fell 37%. A year ago, Singapore hosted the Formula 1 Singapore Grand Prix that led to a more than 100% ADR increase over the weekend.
France and Germany had a good week with same-store RevPAR up by more than 14% each on increasing ADR. Germany's strong week was event-driven. Munich led the country in RevPAR growth, with the quadrennial drinktec trade fair lifting market RevPAR (+52.3%). Düsseldorf followed with 36.4% RevPAR growth as a result of two trade fairs. Finally, Berlin welcomed more than 55,000 runners to the 2025 BMW Berlin Marathon on Sunday, Sept. 21. Ahead of the race, weekend RevPAR rose 72%.
Canada continued its RevPAR streak with the measure rising 3.4%, in line with previous weeks, and again driven mostly by ADR growth. On a total basis, or all hotels, RevPAR in the country was up 4.6% with all major markets – except Montreal – seeing solid growth.
On the other hand, hotels in Australia, Italy, and Mexico were down. Mexico saw a sharp decrease (-16%) due to a significant decline in Mexico City. Sydney and Milan contributed to their respective country’s RevPAR drop.
Outside of the U.S., we expect global hotel RevPAR to rise.
Isaac Collazo is senior director 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.