Global hotel occupancy outside of the U.S. continues to reach new highs, and some of that growth comes at the expense of U.S. hotel demand.
Weekly occupancy comparisons year over year are basically flat for U.S. hotels — an indication that performance is normalizing — but that metric is trending below pre-pandemic levels. That lack of growth is at least partially due to American travelers increasingly heading to international destinations which have been out of reach due to pandemic-related restrictions.
Still, for the latest week on record, ending July 15, U.S. hotel occupancy was 72% — up 10.2 percentage points from the previous week, when demand for hotels was muted by the Tuesday Fourth of July holiday. That’s the highest week-over-week improvement in U.S. hotel occupancy this year, and the third best since March 2020.
Compared to the same week in 2022, occupancy increased only slightly, by 0.1%, and it was down nearly 2 percentage points from 2019. The industry sold 28 million hotel rooms during the week, which due to greater supply was the second-best tally since 2020, behind the peak set at the end of July last year.
The good news for U.S. hoteliers is that performance is set to hit its annual peak again over the coming two weeks.
Despite the lower occupancy, U.S. hotel average daily rate remains elevated, up 1.5% to $158 compared to the same week last year. That resulted in a 1.6% increase in revenue per available room to $115.
The top 25 U.S. hotel markets did better than the national average in year-over-year comparisons. Against the same week in 2022, occupancy was up 0.8% to 76% and weekly ADR increased 2.3%, lifting RevPAR by 3.4%, just above the inflation rate of 3%.
Several top 25 markets reported double-digit RevPAR growth year over year, led by a 25.9% gain in Denver and a 16.1% gain in Las Vegas. In occupancy, San Diego, Denver and Las Vegas led the nation — all above 85% — with San Diego at a high of 93.2%. Atlanta and San Diego both reported their highest occupancy of the pandemic-era.
Denver benefited from the three-night Taylor Swift tour stop with weekend occupancy of 96% and ADR at $241. The Yankees were also in town.
Across the rest of the country, Alaska had the nation’s fourth-highest occupancy at 87.1%, followed by Colorado Springs at 84.5%, which perhaps was impacted by Taylor Swift’s presence in nearby Denver.
Global Performance
Global occupancy excluding the U.S. reached another post-pandemic high of 72.4%, 1.5 percentage points better than the previous high achieved a week ago. The week’s occupancy was 5.7 percentage points higher than the level set a year ago. ADR increased 9.3% year over year to $155 with RevPAR up 18.6% to $112.
It was also another record week for the top 10 countries based on supply as occupancy grew 1.1 percentage points week over week to reach a post-pandemic high of 75.2%. That represents a 7.1-percentage-point premium over the same week last year. ADR for the top 10 grew 7.4% to $146, leading to an overall RevPAR of $110, up 18.7% year over year.
Among the top 10, the U.K. continued to post the highest global occupancy at 84.6%, which was the country’s third highest of 2023 and 0.5 percentage points better than the same week in 2022. U.K. hotel occupancy was 5.2 percentage points ahead of the next highest country in the top 10, which was Italy at 78.2%.
Outside of the top 10, five countries had a higher occupancy than the U.K. Ireland took back the top spot, up 2.2 percentage points year over year to 88%, followed by Malta at 87.6% and Fiji at 87.4%.
Chris Klauda is senior director of market insights at STR. Isaac Collazo is vice president of analytics at STR. William Anns is an analyst at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics team. Please feel free to contact an editor with any questions or concerns. For more analysis of CoStar hospitality data, visit the data insights blog.