Early January is generally a slow period for the hotel industry, but the latest weekly performance data from CoStar shows that higher rates continue to drive year-over-year gains.

For the week ending Jan. 13, U.S. hotel average daily rate was 6.3% higher than a year ago. The strength of that rate gain offset weaker occupancy to push U.S. hotel revenue per available room up 3.3% year over year.

Most of that growth was due to a single market: Las Vegas, which hosted the annual Consumer Electronics Show a week later than in 2023. Rates were even stronger in San Francisco, which hosted the J.P. Morgan Annual Healthcare Conference.

The week was also highlighted by stronger midweek travel in the top 25 U.S. markets.

College football and NFL postseason games also drove performance in host markets.

Outside of the U.S., hotel markets in China and Spain topped the performance charts.

Las Vegas accounts for 3.1% of all U.S. room supply, so significant events, especially during slow periods, can and do affect entire hotel industry results. This week, due to the calendar shift of CES, Las Vegas RevPAR was up 129%. Las Vegas also posted the nation’s highest occupancy at 79.8%.

Excluding Las Vegas, U.S. RevPAR was down 1.8% because of a 2.2-percentage-point decrease in occupancy that was not offset by the 2.3% ADR increase.

Weekday (Monday-Wednesday) performance in the top 25 markets was also good as RevPAR increased 18.3%, driven by a 14.4% increase in ADR, and occupancy was up 2.1 percentage points. The top 25 result was also affected by Las Vegas. Excluding Las Vegas, top 25 weekday RevPAR was essentially flat, with a 1.7% gain in ADR mostly offset by lower occupancy.

Outside of the top 25 markets, weekday RevPAR fell 2.7%, also due to lower occupancy as ADR rose 2.1%.

Market highlights:

• Houston, hosting the College Football National Championship on Monday, Jan. 8, saw RevPAR rise 38.9% with game-day RevPAR increasing 151.2%.
• Anaheim RevPAR increased 23.6%, lifted by the Disneyland Half Marathon weekend.
• NFL playoff action in Detroit pushed RevPAR 7.6%. Detroit also benefited from strong group business.
• San Francisco was notable for its ADR of $552, the highest in the country and double what was achieved in Las Vegas. J.P. Morgan’s Annual Healthcare Conference drove the results with ADR up just slightly compared to what was reported a year ago.
• New York City RevPAR was up 6.2%, a result of occupancy and ADR gains.
• Florida and Hawaii led the nation in occupancy with most of their markets above 70%.

Hotel occupancy in the top 10 countries based on total supply, excluding the U.S., increased 2.5 percentage points to 57.2%. China was one of only three top 10 countries where occupancy increased year over year, up 7.2 percentage points to 56%. ADR was up 5.9% to $106.

Hotel markets in Japan and Indonesia continued to gain occupancy, up 44% and 16.7%, respectively. Overall, top 10 RevPAR increased 10.8% to $61, continuing the trend of double-digit growth.

Spain, recently highlighted in a U.S. Travel report, continued to benefit from a rise in popularity for international travel. Record ADR was posted in popular leisure destinations, especially in the Balearic Islands — Mallorca, Menorca and Ibiza.

In the peak summer months, ADR reached $265, up 3.4%. More recently the national holiday of Epiphany/Three Kings Day attracted tourists with night parades across the streets of Spain. In Madrid, ADR climbed 5.2% to $154, while in Barcelona, the measure grew 13.9% to $139. In the most recent week, occupancy across Spain continued to track upwards, increasing 2.8 percentage points ahead of last year.

Isaac Collazo is vice president of analytics at STR. Chris Klauda is senior director of market insights at STR. William Anns is a research analyst 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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