US Weekly Hotel Performance Shows Signs of Group, Business … – CoStar Group

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

Demand for U.S. hotels from group and business travelers showed signs of picking up in the week following the Easter holiday, as industry performance overall continues to normalize.
For the week ending April 16, U.S. hotel industry occupancy was 64.2%, up 2.8 percentage points from the prior week and 2.3 percentage points year over year. Average daily rate increased 4.7% year over year to $155; and revenue per available room reached $100, up 8.6% year over year.
The top 25 U.S. hotel markets fared better than average, with occupancy of 69.5%, up 1.8 percentage points over the prior week; ADR of $186 and RevPAR of $129 represented a 2.7% and 5.5% week-over-week increase and a 5.4% and 6.5% year-over-year increase, respectively.
Compared to the matched Easter week in 2022, the top 25 markets fared better than all other markets with occupancy down 1% and ADR and RevPAR up 4.4% and 2.9%, respectively. All other markets were down 2.4 percentage points in occupancy, up 2.3% in ADR and down 1.6% in RevPAR.
Tuesday and Wednesday occupancy in the top 25 markets also exceeded 2022 levels, which is an indication that business travel demand is improving.
Group and transient hotel performance in the luxury/upper upscale segment have started to return to more normal levels.
Group demand rebounded with almost 1.6 million room nights sold. That represented a significant improvement over the prior week, but is down 3.9% compared to the matched week in 2022, when some pent-up group travel was unleashed amid the fading impact of the omicron variant of COVID-19.
Weekly group demand was about 15% below the matched Easter Sunday week in 2019.
Transient demand, while declining slightly week over week, was 3.4% higher than the matched week in 2022 and essentially even with the week in 2019.
Group demand in the top 25 markets was down 4.3% compared to the matched week last year. Chicago, Dallas, Minneapolis, New York, Oahu and St. Louis were the exception, with group demand exceeding 2022 levels.

Global occupancy, excluding the U.S., also rebounded this week to 64.5%, up 3.3 percentage points week over week and 10 percentage points ahead of last year. Weekly ADR rose 9.2% year over year to $137, resulting in RevPAR of $89, up over 25% compared to last year.
Entering the summer travel season, the dramatic growth so far this year is expected to moderate as the pandemic moves out of our rearview mirror. Growth is still expected with a now fully global opening of borders but at a less dramatic level.
Among the top 10 countries based on supply, occupancy was up on average 14 percentage points year over year, dominated by China (+32.7 percentage points) and Japan (+13.8 percentage points). Canada and Indonesia also posted significant year-over-year occupancy gains, up 6.8 percentage points and 6.7 percentage points, respectively.
Outside of the top 10 counties, several island countries had occupancy above 75% over the past two weeks including the Bahamas, Jamaica, Puerto Rico and Curacao, along with two northern European countries, the Netherlands and Ireland. Fiji also made the list this week.

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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