While one week won’t set trends and there will likely be many ups and downs on the road to recovery for business and group travel, STR’s latest weekly performance data shows that the top 25 markets in the US, in particular, , indicating that demand for hotels is returning. where its absence is very evident.
The coming weeks are likely to bring some unrest among hoteliers over these demand segments, but it’s all foreseeable. Expected to have a negative impact on travel, demand for leisure travel will be aided by US school holidays, such as the observance of Columbus/Indigenous Day.
U.S. hotel demand surged after several weekly declines typical of this time of year when the travel season transitions from summer to fall. Week ending September 17thCompared to the previous week, demand increased by 13% and capacity utilization reached a six-week high of 69.6%.
Weekday occupancy is slightly higher at 69.9% and even higher at 75.5% for the top 25 markets. Occupancy rates for hotels in the top 25 markets on weekdays increased only once during the week of June 18, 2022 since March 2020.
The nominal average daily rate reached a seven-week high of $156, up 5.8% from the previous week and 18% from the previous year. Adjusted for inflation, the real ADR was the same as in the same week in 2019. After three weeks below $100, nominal revenue per available room jumped to $108, up 19.4% from the week before and up 31% from the same week. last week. Underlying RevPAR was slightly below 2019 values.
Over the past 22 years, US hotel demand in the first full week after Labor Day has increased by an average of 14.5%.
Demand rose 13% in the week ending September 17th of this year, reaching the low end of the range since 2000. The US hotel industry has sold his 27.2 million room stays. However, due to the holiday calendar shift, it did not reach peak demand for the 38th week of the year. The record was set in 2019, two weeks after his Labor Day vacation, when the industry sold 8,000 more nights for him than this year.
Business and group travel contributed the most to the strong increase in demand on weekdays.
Weekday demand was the seventh highest since the pandemic began. The past six pandemic-era highs were all achieved during the 2022 summer season, when leisure travelers were also filling hotel rooms. Excluding weekday demand, it was the highest since the pandemic began and the 15th all-time high dating back to 2000.
The top 25 US hotel markets benefited the most from the return of business and group travelers.
Weekday occupancy exceeded 70% and exceeded 80% in 18 markets, including six markets: Boston, Chicago, Denver, New York, San Francisco and Seattle. Seattle and New York lead the top 25, both with his weekly occupancy rate above his 90%.
Hotel markets in Chicago, New York and Seattle saw the highest demand on weekdays since the pandemic began. Philadelphia also set a pandemic-era demand record with his 69% weekday occupancy.
Four markets—Houston, Miami, New Orleans, and Tampa—were lagging behind with weekday occupancy rates around 60%. This is not surprising, as September is typically the month with the lowest occupancy rates for Miami and Tampa, but occupancy rates for Houston and New Orleans tend to increase around this time of year.
Weekday hotel demand and occupancy (79%) in the Central Business District were also the highest since the start of the pandemic era. Weekday occupancy exceeded 90% in his four central business districts of Boston, Chicago, New York Financial District and Seattle. New Orleans had the lowest weekday occupancy in the central business district at 47%. All other central business districts had over 65% occupancy on weekdays, with most over 70%. His weekly demand and occupancy rate for the Central Business District was 76%, also a pandemic-era high.
Group demand on weekdays was also the highest since March 2020, with luxury hotels and luxury hotels selling more than 1.1 million rooms on weekdays.
The group’s total demand, all chain sizes and classes, accounted for more than one-third of the increase in weekday demand, accounting for 16% of the industry’s total weekday demand.
Weekday occupancy rates are in the 70% range for mostly business-oriented chain scales (including upper upscale, upscale and upper midscale), with 79% upper upscale hotels leading the way. Not surprisingly, demand for luxury hotels was at its highest since the pandemic began. More than half of the increase in weekday demand for luxury hotels is due to increased group demand. Weekly uptime exceeded 70% at 4 of the 7 chain scales.
Weekend performance also recovered from the post-summer slump, with 77% uptime. Weekend occupancy is slightly higher at 78% for the top 25 markets, with half of the markets having over 80% occupancy and all but two over 70%. Among all submarkets, Gatlinburg and Pigeon Forge in Tennessee had the highest weekend occupancy, both at 95%.
Adjusted for inflation, the weekly real ADR rose to $135, slightly improving from the same week in 2019. Nominal ADRs for the top 25 weekly markets hit a pandemic-era high of $189, while real ADRs peaked at $164. Since the first week of December 2019. Weekday nominal ADRs for the top 25 markets were even higher at $195, the third highest on record. The weekday real ADR exceeded $169.
Nominal RevPAR surpassed 2019 levels for the week in nearly every market, driven by a surge in demand and a continued surge in ADRs. Half of all markets, including Chicago, Miami, Orlando, San Diego and Phoenix, have weekly real RevPAR higher than in 2019. Among the top 25 markets, Orlando leads compared to 2019, with a 19% higher real weekday RevPAR.
In the 28 days ending September 17, 43% of the 166 STR-defined markets had a real RevPAR greater than 2019. Only his two markets, San Jose and San Francisco, were still classified as Recessed, as real RevPAR was lower than in 2019. 80% of 2019.
Isaac Collazo is STR’s Vice President of Analytics.
This article represents an interpretation of data collected by STR, CoStar’s hospitality analytics firm. If you have any questions or concerns, please feel free to contact the editors. For further analysis of the STR data, Visit the Data Insights Blog on STR.com.
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