Despite Occupancy Drop, Hotels Benefit from Robust Leisure Travel … – CoStar Group

By Chris Klauda, M. Brian Riley and Isaac Collazo
STR

Easter and Jewish Passover in the U.S. dampened demand for U.S. hotels last week, which is typical as business travelers and conference planners schedule around those holidays to be home with family.
The decline in hotel room nights sold in the U.S. for the week ending April 8 was most pronounced on the weekend, Friday and Saturday, which accounted for more than 80% of the week’s room demand loss. STR weekly performance data for Easter Sunday and Monday, which will be analyzed in next week’s article, is also expected to be lower due to the religious observances.
Hotel performance in the U.S. and globally was in line with past Easter weeks, and is expected to pace higher in the coming weeks.
Despite lower demand from business and conference travel, leisure travel remained strong during the week. Demand from transient and leisure travelers exceeded 4 million rooms for the week, the highest level since late December. Transient demand was also near the record high set in August 2022. Group demand is expected to rebound to more normal seasonal patterns.

Continued strength in U.S. hotel industry average daily rate helped to offset the loss in occupancy for the week, though the rate of ADR and revenue per available room growth has slowed dramatically since 2022.
ADR for the week was $153, slightly ahead of last year and when combined with occupancy, resulting in RevPAR of $94, down 6.7% year over year due in large part to a shift in the timing of the Easter and Passover holidays. Compared to the week of Easter 2022, RevPAR was up 2.2% and was the highest ever recorded for the holiday week but only the eighth best for the holiday week when accounting for inflation.
Occupancy declined 4.9 percentage points year over year to 61.3% compared to last year’s occupancy of 66.2%, when the week did not include the religious observances.
Compared to the Easter/Passover week last year, occupancy was nearly flat — 61.3% versus 61.9%.
Occupancy and ADR in the top 25 U.S. hotel markets generally followed the same pattern as the U.S., with occupancy decreasing to 67.7% compared to 72.1% last year and ADR even with last year. Compared to the Easter/Passover week in 2022, top 25 market occupancy was flat (67.7% versus 68%) and ADR increased 2.8%.
A diverse set of large markets reported higher occupancy compared to the Easter/Passover week last year. These markets were Boston, Houston, Minneapolis, New York, Orlando, Saint Louis, Tampa and Washington, D.C. With the exception of New York and Orlando, these markets had modest-to-weak performance during the first part of last year, which partly explains the more distinguished yearly gains in 2023.
Occupancy outside of the 25 markets dropped to 57.9% from 62.5% a week ago. For these markets, there was also a significant occupancy decline compared to last Easter/Passover, which is not surprising given their substantial recovery in the prior two years.
Weekday occupancy fell 1.3 percentage points week over week, while weekend occupancy dropped 13.4 percentage points. In the top 25 markets, weekday occupancy dropped to 66.8% from 69.5% a week ago. However, nine of the top 25 markets including Boston, Los Angeles, New York and San Francisco had weekday occupancy that was either flat or higher compared to the previous week. New York led the pack with weekday occupancy of 80.3%, up 4.2 percentage points from a week ago and 6.6 percentage points higher than a year ago. Weekend occupancy in the top 25 markets fell 10.8 percentage points week over week to 70%.

Global occupancy, excluding the U.S., also declined to 61.2%, down 3.7 percentage points from the previous week but 10 percentage points ahead of last year. Weekly ADR rose 23.1% year over year to $144, resulting in RevPAR up almost 50% compared to last year at $88. RevPAR has grown by 45% or more every week this year. In addition, both ADR and RevPAR were at their highest levels of the past 12 weeks.
Among the top 10 countries based on supply, occupancy was up on average 5.7 percentage points year over year, led by China and Japan, where occupancy was up 21.5 and 18.6 percentage points, respectively. Mexico, coming off its peak spring break season, was the only country to post an occupancy decline compared to last year. Globally, weekly occupancy was above 75% in several island countries — the Bahamas, Jamaica, Puerto Rico and Curacao — along with three northern countries: the U.K., Netherlands and Ireland.
Isaac Collazo is VP of analytics at STR, Chris Klauda is senior director of market insights at STR and M. Brian Riley is senior 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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