Whereas per week doesn’t make a pattern and the street to restoration for enterprise and group journey will seemingly have many ups and downs, the most recent weekly efficiency information from STR exhibits that demand for resorts is coming again, notably within the U.S. high 25 markets, the place its absence has been very obvious.
The following a number of weeks will seemingly trigger some anxiousness amongst hoteliers round these demand segments, however it’s all predictable. Observances of the Jewish holidays Rosh Hashanah and Yom Kippur are anticipated to have a destructive impact on enterprise and group journey, and leisure journey demand might be aided by U.S. faculty breaks, such because the observance of Columbus/Indigenous Peoples’ Day.
After a number of consecutive week-over-week declines, typical for this time of yr because the journey season transitions from summer time to fall, U.S. lodge demand soared again for the week ending Sept. 17. In comparison with the earlier week, demand was up 13%, whereas occupancy reached a six-week excessive of 69.6%.
Weekday occupancy was barely higher at 69.9%, and that metric was even higher within the high 25 markets at 75.5%. Weekday high 25 market lodge occupancy has solely been increased one different time since March 2020 — within the week of June 18, 2022.
Nominal common each day charge reached a seven-week excessive of $156, up 5.8% week over week and 18% yr over yr. Actual ADR, adjusted for inflation, was equal to what it was in the identical week of 2019. After three weeks beneath $100, nominal income per out there room jumped to $108, 19.4% larger than per week in the past and 31% increased than in the identical week final yr. Actual RevPAR was slightly below 2019’s worth.
Over the previous 22 years, U.S. lodge demand for the primary full week after the Labor Day vacation has elevated on common by 14.5%.
This yr within the week ending Sept. 17, demand was up 13%, on the decrease finish of the vary seen since 2000. The U.S. lodge trade offered 27.2 million room nights, essentially the most ever for a full week after Labor Day. Nonetheless, because of the calendar shift within the vacation, it was not the best demand for the thirty eighth week of the yr. That file was set in 2019, two weeks after the Labor Day vacation, when the trade offered 8,000 extra room nights than this yr.
Enterprise and group journey contributed essentially the most to the sturdy development in weekday demand.
Weekday demand was the seventh highest for the reason that begin of the pandemic. The earlier six pandemic-era highs have been all achieved in the course of the 2022 summer time season when leisure vacationers have been additionally filling lodge rooms. Excluding the prime summer time journey months of June and July, weekday demand was the best for the reason that begin of the pandemic and the fifteenth highest of all time going again to 2000.
The U.S. high 25 lodge markets benefited essentially the most from the return of enterprise and group vacationers.
Weekday occupancy topped 70% in 18 of the markets with six — Boston, Chicago, Denver, New York, San Francisco and Seattle — surpassing 80%. Seattle and New York led the highest 25, each topping 90% occupancy for the week.
Chicago, New York and Seattle lodge markets had their highest weekday demand for the reason that begin of the pandemic. Philadelphia additionally set a pandemic-era file for demand with weekday occupancy at 69%.
4 markets — Houston, Miami, New Orleans and Tampa — have been laggards with weekday occupancy within the low-60% vary. September is often the bottom occupancy month for Miami and Tampa, so that isn’t a shock, however Houston and New Orleans occupancy tends to go up presently of yr.
Central enterprise district weekday lodge demand and occupancy (79%) was additionally the best its been for the reason that begin of the pandemic period. Weekday occupancy surpassed 90% in 4 central enterprise districts — Boston, Chicago, New York Monetary District and Seattle. New Orleans had the bottom weekday occupancy of the central enterprise districts at 47%. All different central enterprise districts reported weekday occupancy above 65%, and most have been above 70%. Full-week demand and occupancy for the central enterprise districts was 76%, additionally the best of the pandemic period.
Weekday group demand was additionally the best its been since March 2020, as luxurious and upper-upscale resorts offered greater than 1.1 million room nights in the course of the week.
Complete group demand, all chain scales and lessons, accounted for greater than a 3rd of the achieve in weekday demand and made up 16% of the trade’s whole weekday demand.
Weekday occupancy was within the mid-70% vary within the predominately business-oriented chain scales — together with upper-upscale, upscale and upper-midscale — led by upper-upscale resorts at 79%. Not shocking, upper-upscale lodge demand was the best its been for the reason that begin of the pandemic. Greater than half of the weekday demand achieve by upper-upscale resorts got here from elevated group demand. Full-week occupancy surpassed 70% in 4 of the seven chain scales, led by luxurious at 73%.
Weekend efficiency additionally returned from its post-summer doldrums with occupancy of 77%. Weekend occupancy was barely increased within the high 25 markets at 78%, with half of the markets reporting occupancy above 80% and all however two above 70%. The best weekend occupancy amongst all submarkets was in Gatlinburg and Pigeon Forge in Tennessee, each at 95%.
Weekly actual ADR, adjusted for inflation, elevated to $135, which was barely higher than within the comparable week of 2019. Weekly high 25 market nominal ADR achieved a pandemic-era excessive of $189, as did actual ADR at $164, reaching its highest stage for the reason that first week of December 2019. Weekday nominal ADR within the high 25 markets was even increased at $195 and was the third highest in historical past. Actual weekday ADR topped $169.
With the bounce in demand and the continued surge in ADR, nominal RevPAR was above 2019 ranges in almost each market in the course of the week. Half of all markets had weekly Actual RevPAR above 2019 together with Chicago, Miami, Orlando, San Diego and Phoenix. Among the many high 25 markets, Orlando led in comparisons to 2019, with weekday actual RevPAR 19% increased.
Within the 28 days ending Sept. 17, 43% of the 166 STR-defined markets had actual RevPAR above 2019. Solely two markets, San Jose and San Francisco, have been nonetheless categorized as being in “recession,” as actual RevPAR was lower than 80% of what it was in 2019.
Isaac Collazo is VP Analytics at STR.
This text represents an interpretation of knowledge collected by CoStar’s hospitality analytics agency, STR. Please be happy to contact an editor with any questions or issues. For extra evaluation of STR information, go to the info insights weblog on STR.com.