Group business is driving industry performance. For the 10th consecutive week, group demand (among Luxury and Upper Upscale hotels) increased, rising 7.4% YoY. Group demand was just one percent below 2019.
While 2023 Lunar New Year produced positive performance, especially as the first since 2019 outside of a COVID lockdown, this year's holiday brought a different level of success to the country.
Spring break season is officially here, and tracking school calendar data becomes critical during this time in order to predict travel demand across the U.S. The swings in academic calendar patterns from year to year can generate substantial waves in hotel performance, as vacation scheduling directly impacts over 50 million public K-12 students and their families across the country.
In this global update, STR focuses on performance, pipeline, and factors that influenced the data in 2023, while also looking ahead to what’s in store for the rest of 2024.
Growth in revenue per available rooms (RevPAR) returned to the U.S. following the previous week's decrease. Occupancy held somewhat steady, average daily rate (ADR) increased, weekday (Monday-Wednesday) performance grew, and group demand exploded, surpassing both the 2023 and 2019 comparables. Looking at select top countries elsewhere in the world, strong performance continued with eight of 10 countries seeing positive occupancy gains and six of 10 seeing ADR increases.
RevPAR showed modest year-over-year (YoY) growth in January, reflecting a return to pre-COVID patterns of low single-digit gains. RevPAR was lifted by a healthy ADR increase, which was partially offset by an occupancy decline. Demand across the U.S. has declined year over year for the past 10 months. Fortunately, supply increases have remained modest and are expected to remain low for the rest of the year as the pace of rooms in construction has slowed.
As Spring travel gears up, falling demand and softening ADR in the U.S. is concerning, however, hotel performance is expected to grow in the weeks ahead. Global performance continued to be strong and is expected to remain on a positive trajectory over the coming months, helped by Americans who continue to travel abroad.
Growth was balanced with 64% of markets showing increased occupancy and 70% achieving a higher average daily rate (ADR) than last year.
The 10 highest hotel supply countries outside of the U.S. saw occupancy that was largely in line with the comparable week last year. Seven of the 10 countries saw an occupancy change between -2ppts and +2ppts.
Las Vegas achieved the highest Super Bowl weekend average daily rate (ADR) and revenue per available room (RevPAR). However, the market's levels surpassed the forecast, easily overtaking the previous records held by Miami (2020). Friday and Saturday performance in Las Vegas was so high that it boosted weekly levels for the entire U.S.