US hotels post up-and-down week, feel boost from Passover calendar shift

U.S. hotel revenue per available room increased 4.1% in the week of April 27 to May 3, reflecting an easy comp to Passover last year.

Both hotel occupancy and ADR drove the RevPAR gain, which averaged 11.1% Sunday through Tuesday. Last year, Passover ended on Tuesday. For the rest of the week, Wednesday and Thursday saw modest RevPAR gains (3.3%) while the weekend declined 2.1%.

The top 25 U.S. hotel markets played a significant role in the roller coaster performance. Top 25 RevPAR during the first three days of the week increased 16.3% followed by a 4.3% gain Wednesday and Thursday and a 4.5% decline on the weekend. It was a slow week in Las Vegas, especially the weekend, which had a significant impact on the top 25 markets. Excluding Las Vegas, top 25 RevPAR was flat on the weekend.

There was considerable variability across the top 25 markets with RevPAR ranging from up 116% to down 19.1%. San Francisco topped the list of RevPAR gainers this week, hosting the RSA Conference a week early this year. Both ADR and occupancy were higher this year than during the event last year. From Monday through Wednesday, occupancy reached 94.4%, up 1.5 percentage points versus last year’s conference with ADR rising 7% to $428. For the full week, San Francisco occupancy was 81.9% with ADR at $326.

Five other top 25 markets posted double-digit RevPAR gains:

• Orlando (+20.1%) and Miami (+16.4%) advanced by double-digits throughout the entire week.
• Chicago, with RevPAR up 15.6% for the week, landed in high double-digits for the first three days, averaging 57.0%, followed by slowing performance over the rest of the week.
• Orange Country, California, saw double-digit RevPAR increases Monday through Thursday with the end of the week continuing strong, up just over 4%.
• Minneapolis rounded out the list with double-digits gains Sunday through Thursday and a double-digit decline on Saturday.

Sixteen of the top 25 hotel markets saw RevPAR gains. However, three markets saw large RevPAR decreases including Las Vegas (-19.1%), New Orleans (-10.3%) and Nashville (-7.8%). Their decreases were driven in part by sharp decreases over the weekend.

Among the next 25 largest hotel markets, there was less variability with RevPAR ranging from up 29.8% to down 15.5%. Pittsburgh, Fort Worth, Charleston and Fort Lauderdale all posted double-digit gains with weekends seeing the largest increases in Pittsburgh and Fort Worth while Charleston and Fort Lauderdale experienced healthy gains all week.

Group demand in luxury and upper-upscale hotels rebounded this week, rising 10.7%, benefiting from the Passover calendar shift. Transient demand also increased, up 1.4%. Group and transient ADR increased 3.1% and 3.7%, respectively.

Across the top 25 markets, group demand gains were even more dramatic, up 12.2% while transient demand held at (0.2%). ADR increased 2.8% for both group and transient. Top 25 leaders in group demand gains included San Francisco up 184.3%, Saint Louis (+52.2%), Seattle (+31.3%), Orlando (+28.9%) and Minneapolis (+23.9%).

Chain-scale bifurcation continued with luxury and upper-upscale hotel chains advancing RevPAR the most, followed by smaller gains in upscale and upper-midscale. Economy chains decreased due to declines in both ADR and occupancy. The Passover impact was reflected in chain-scale performance with the first three days seeing growth for all chains, except economy. Slower gains were seen thereafter followed by declines over the weekend.

With April in the books, preliminary U.S. RevPAR for the month is predicted to be flat. One positive note is that April last year benefitted from the Total Solar Eclipse and when removing the 16 markets in the path of totality from the estimate, April RevPAR is positive.

Next week will be the first week in a while when we will have a clean calendar and more stable comparisons. STR’s Forward STAR predicts a strong May and June with some softness in July. Keep in mind the further out the booking window, the less robust the booking estimate. With so much speculation on summer travel, we will stick to waiting for the data and seeing what it tells us about the future.

The strong global RevPAR growth seen in all of April, except in the week ending April 26, returned with the measure advancing 9.7%. All of the top countries, except China, saw RevPAR increase.

Japan remained the leader with RevPAR rising by nearly 40% lifted by the Golden Week holiday which began Tuesday, April 29. India posted strong performance, however, the recent military strikes are expected to affect its growth in the coming weeks. Mexico continued to see strong performance while France and Germany posted gains affected in part by the calendar shift.

Isaac Collazo is senior director of analytics at STR. Chris Klauda is director of market insights 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.

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