HENDERSONVILLE, Tenn. — STR has uncovered weekly global hotel-performance trends from November 26 to December 2, 2023.
Moving past Thanksgiving, U.S. hotel occupancy reached 54.2 per cent, an expected increase of 4.8 per cent compared to the prior week but down 0.9 per cent versus last year. Average daily rate (ADR) increased 0.8 per cent year-over-year (YOY), which was insufficient to grow RevPAR (down 0.8 per cent). Miami had a significant impact on performance this week due to the calendar shift of Art Basel, which resulted in a 50.6 per cent RevPAR decrease for the market. Excluding Miami, U.S. RevPAR would have increased 1.2 per cent, which is in line with 2017, a year with the same calendar makeup as 2023.
Despite the negative impact from Miami, weekdays showed better performance with RevPAR increasing 2.7 per cent, driven by ADR (up 2.7 per cent) as occupancy was flat to last year. The weekend and shoulder periods produced declines in both occupancy and ADR, resulting in RevPAR declines of 3.3 per cent and 3.1 per cent, respectively.
Weekday performance in the top 25 markets was similar to the industry overall. However, the decrease in weekend RevPAR (down 5.2 per cent) was much worse than in the remaining markets (down 0.7 per cent) due to the impact of Miami. The shoulder period for both market types was somewhat similar. Overall, the change in ADR was the big driver between the top 25 and the remaining markets. ADR was down in the top 25 markets (0.2 per cent) and up elsewhere (1.9 per cent). Excluding Miami, top 25 market ADR increased 3.4 per cent, and RevPAR topped 2.4 per cent, well ahead of all other markets (up 0.2 per cent).
New York City and Las Vegas posted the highest occupancy across the top 25 M\markets, contributing to RevPAR increases of 17.2 per cent and 12.2 per cent, respectively. The greater RevPAR growth impact in the two markets came from ADR. These markets also experienced the highest weekday occupancy.
New York City’s occupancy topped 2019, as it has 26 times this year. Supply declines are contributing to the occupancy gains. Since the beginning of June, supply has decreased by more than three per cent, with most of the declines driven by hotels closed for the housing of migrants. Demand is still lower than what it was in 2019, but ADR growth is soaring with most of the growth coming from the smaller, non-traditional submarkets in the city, which have a limited amount of supply but have seen a sharp decrease in inventory.
Group demand returned and was essentially the same as last year. Notable this year is the change in week part mix, which reflects the strengthening of business groups as weekday group demand increased 2.5 per cent YOY, while group demand declined on the weekend (down 0.8 per cent) and shoulder days (down 2.9 per cent).
Global occupancy, excluding the U.S., reached 66.8 per cent, up 5.5 per cent YOY and down slightly week over week (1.9 per cent). ADR reached US$131, up 7.3 per cent YOY with RevPAR at US$87 (up 17 per cent YOY).
Performance in the top 10 countries, based on total supply, was slightly above the global average with occupancy of 67.4 per cent, up 7.4 per cent YOY and down marginally from the previous week (1.7 per cent). The group was led by strong gains in both occupancy and ADR from countries outside of Asia, mainly Germany and Spain.
Looking ahead, STR expects the industry data to show the benefit of the slightly longer time between Thanksgiving and Christmas this year. This should encourage more travel than previous years, particularly in the business segment. Outside the U.S., hotel performance will continue to improve for the rest of the year given the easier comps to 2022. As the year ends, events, festivals and holiday activities will be the main drivers of travel throughout the globe.
