With fewer students and families on spring break vacations, demand for hotel rooms in the U.S. dipped in the latest weekly performance results, but the hotel industry at large and several markets still achieved metrics that were among the best for the pandemic era.
For the week of March 20-26, U.S. hotel industry occupancy was 65.5%, a 1.3% decrease from the prior week when the largest percentage of students in kindergarten through 12th grade and colleges were on spring break.
That occupancy average was nearly eight percentage points higher than it was for the same week in 2021, and down only five percentage points from this time in 2019.
U.S. hotel rates were at the third-highest level ever with average daily rate of $149 — a 1.5% decline from the prior week but 13% higher than it was in the same week of 2019. Adjusted for inflation, ADR for the week was still 1% higher than the 2019 level.
Revenue per available room for the week was $98, the fifth highest since the start of the pandemic, but down 3.5% from the prior week.
Across the U.S., 68% of markets had RevPAR that was higher than in the same week of 2019, and 28% of markets achieved 80% to 100% of the 2019 RevPAR level. The combined percentage of both categories was the highest in 12 weeks.
Hotel performance continues to be strong in the top 25 largest U.S. hotel markets and in central business districts, which is an indicator of the recovery of business and corporate group travel demand.
Occupancy in the top 25 markets remained above 70% for a second consecutive week, down 0.9 percentage points from the prior week, making it the second-highest level since the start of the pandemic.
ADR and RevPAR for the top 25 markets were also at the second-highest levels of the pandemic era. The previous pandemic record for RevPAR was set the prior week, and the previous ADR record was set during the 2021 Christmas holidays. Top 25 market ADR was 9% higher than it was in the same week of 2019.
Of the 10 times since the start of the pandemic that weekly top 25 ADR has surpassed 2019 levels, half have occurred in the past six weeks.
Group demand in the top 25 markets was also the highest of the pandemic era, and 84% of the comparable 2019 level.
Central business districts achieved their highest weekly RevPAR since the start of the pandemic at $147, which was still 10% lower than in the comparable week of 2019. Hotel occupancy in central business districts topped 68% for the week, another pandemic-era record and up 0.8% from the previous week. Weekday and weekend (Friday and Saturday) occupancy were also at record highs with shoulder days (Sunday and Thursday) at their second-highest level, slightly behind the previous week. Weekday ADR for central business districts was $209, the highest it has been since the recovery began and just barely over 2019’s level. Full-week ADR in the central business districts was $216, the second best so far.
Occupancy was also the highest it’s been since the start of the pandemic for luxury and upper-upscale hotels, at 70.2% and 67.5%, respectively, for the week. More than half of the hotels in these chain-scale segments reported occupancy greater than 70%, and nearly 30% had occupancy of 80% or more.
Market Highlights
Despite an overall seasonal slowing in U.S. hotel industry occupancy, several markets reported their highest occupancy since the start of the pandemic, including San Francisco at 73.9%, Los Angeles at 79% and San Jose at 63.4%.
Citywide events helped to drive San Francisco’s hotel performance. The Game Developers Conference and NCAA March Madness contributed to the city’s highest group demand since early March 2020.
The list of the top 10 markets for hotel occupancy continues to be dominated by Florida, which accounted for eight of those spots. Phoenix and Hawaii/Kauai also appeared on that leaderboard. Each market in the top 10 reported weekly occupancy greater than 80%, led again by the Florida Keys at 89.9%. In total, 12 markets posted occupancy above 80% with another 32 markets reporting occupancy above 70%.
Central business districts in Dallas, Los Angeles, Philadelphia and Washington, D.C., all reported the highest hotel occupancies since the start of the pandemic — at 73.2%, 78.8%, 63.3% and 67.8%, respectively.
Hotels in six markets — including San Francisco, Memphis and Richmond, Virginia — reported their highest ADR since March 2020. Another 17 markets achieved the second-highest ADR of the pandemic era, after most reached the peak the previous week.
In each of the past three weeks, the Dallas hotel market has posted its strongest occupancy of the pandemic era, including this most recent week with a level of 71.8%, which is up from 69.9% a week ago.
Orlando, the nation’s second-largest hotel market based on supply, continued to surprise with weekly occupancy above 80% for the past five weeks. For the week of March 20-26, Orlando hotel occupancy fell to 83.5% from its pandemic-era high the week prior (90.5%). Weekend occupancy for the market remained above 90% as it has for the past six weeks. Additionally, weekly group demand for luxury and upper-upscale hotels in Orlando was the highest since early March 2020. Unlike in 2020, more of that that weekly group demand was on the weekend, but total weekday (Monday to Wednesday) group demand was the highest in Orlando since the pandemic started.
Isaac Collazo is VP 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.