Analysis by Isaac Collazo, Will Anns
Highlights
- Hurricane recovery, college football, Taylor Swift and more lift U.S. RevPAR
- Strong RevPAR growth seen in Northeastern U.S. hotels
- Global performance unwavering
In the week ending 19 October 2024, U.S. revenue per available room (RevPAR) advanced 4.2% on 2.5 growth in average daily rate (ADR) and a 1.1 percentage point (ppt) increase in occupancy. RevPAR growth in the Top 25 Markets trailed slightly versus the remaining markets, which saw ongoing demand and ADR gains from areas impacted by Hurricanes Helene and Milton. Additionally, Taylor Swift’s tour stop and the Adobe MAX conference helped Miami drive 0.4ppts of the national RevPAR gain. Additionally, for a second consecutive week, all chain scales posted weekly RevPAR growth.
Northeastern hotels lead nation
Hotels in the Northeast reported the largest RevPAR increase among the regions, up 12.9% on a strong ADR lift (+7.6%). Double-digit ADR increases were seen across the region, led by Rhode Island (+20%).
New York City saw ADR advance 10.9% with RevPAR rising 16.6%. Occupancy in the city reached 93.7%, which was its highest level since 2019. New York also had the nation’s highest weekly occupancy for a second consecutive week and has been the occupancy leader in six of the past eight weeks. NYC ADR ($414) was second only to Maui ($475).
RevPAR growth in the Midwest and South was nearly identical (~6.5%) with ADR edging out occupancy growth in both regions. Wisconsin North led the Midwest in RevPAR gains (+38.6%) on a 25.1% increase in ADR. Minneapolis and Chicago were not far behind with RevPAR growth above 17%. Chicago’s surge also came from ADR, whereas Minneapolis was led by occupancy.
In the South, markets impacted by recent hurricanes continued to see growth tied to displacement demand. In the most recent week, Augusta reported the nation’s largest RevPAR increase (+75.5%) on double-digit occupancy and ADR gains. Knoxville, Sarasota, Greenville/Spartanburg, and Florida Central North followed with RevPAR gains above 42%. These five markets added 0.5ppts of RevPAR growth to the industry. If you exclude the five aforementioned markets along with Florida Central South, Tampa, and Miami, the latter due to Taylor Swift and the Adobe MAX conference, U.S. RevPAR growth was 3% versus the reported 4.2% increase. North Carolina West, which includes Asheville, one of the hardest hit areas from Hurricane Helene saw RevPAR fall 16.1% due to a retreat in ADR.
Western region hotels saw weekly RevPAR decrease 4.1% due to sharp declines in Anaheim, Denver, Albuquerque, Las Vegas and Maui. The best performing market in the region was Salt Lake City, which saw RevPAR increase 15.9%. San Francisco’s RevPAR was up 5%, all on occupancy as ADR decreased. Occupancy reached 75.7% in the market.
In total, shoulder days (Sunday & Thursday) and the weekend (Friday & Saturday) drove national RevPAR growth as the weekday (Monday – Wednesday) level was flat. At 6.6%, the weekend RevPAR increase was the largest of the past 28 weeks.
Group demand stumbles
For a second consecutive week, group demand among Luxury and Upper Upscale hotels decreased versus the same week last year. In this most recent week, the metric was down 2.2%, which was only slightly less than the prior week’s decrease (-2.3%). While it was also down last week, the measure was above the level seen in 2019. Group ADR did better than demand, rising by 2.6% versus the 2% gain seen a week earlier.
Of course, there were winners. In the Top 25 Markets, New York City, San Francisco, and Miami saw a sharp increase in group demand (23%+). Detroit, Houston and Los Angeles also reported double-digit gains. Overall, Tampa led in group demand growth (+74.5%), which is likely related to the hurricane rebuilding efforts.
All hotel types see second week of growth
Luxury hotels led the nation with RevPAR growth of 11% on a 7.7% ADR increase. Like with the national total, the weekend gain was much higher (+17%) than the weekday (+4.6%). It comes as no surprise that Miami, with three nights of Taylor Swift and the Adobe Max conference, saw the largest increase of Luxury RevPAR (+62.4%) with neighboring Fort Lauderdale at +57.9% both from ADR and occupancy increases (+46.2% and +56%, respectively).
Also joining the party was Minneapolis, where luxury hotels posted a 57.6% increase. However, the market’s ADR was just less than one-third of what the other two cities reported, which was north of $600. Weekend ADR in Miami and Fort Lauderdale topped $850 but that wasn’t the highest in the nation. That honor went to Austin luxury hotels, which saw ADR at $1,306 due to the Texas/Georgia football game and F1 racing.
Among the remining chain scales, Midscale hotels had the next highest RevPAR growth (+4.9%) with its gains coming from hurricane impacted markets, including Augusta (+144%), Sarasota (+97.1%), Tampa (+56.3%), Greenville/Spartanburg (+54.7%) and several others.
Upper Midscale, Economy, and Upscale chains saw RevPAR increase by more than 3.5% with Upper Upscale brands the laggard among branded hotels at +2.8%. However, there were two standout markets for Upper Upscale hotels: Knoxville (+124.8%) and Sarasota (+46.2%). Knoxville benefited from hurricane impact business but also from the Tennessee versus Alabama football game, as weekend RevPAR grew more than 400%. Shoulder and weekday periods also saw exceptional RevPAR gains.
Global performance still climbing
Global RevPAR, excluding the U.S., climbed 8.3% on a 6.7% ADR gain. Occupancy reached 72.7%, which was the sixth highest level of the year. Among the 10 largest countries, based on supply, RevPAR increased 5.6%, nearly all on ADR (+5.1%).
Canada and China held the set back as both saw RevPAR decreases (-9.4% and -4.3%, respectively). Canada’s decline came on falling occupancy and China’s on retreating ADR. For the globe, shoulder days produced the highest RevPAR gains (+9.7%) followed by the weekend (+8.3%) and weekdays (+7.3%).
The decline in Canada was due to the calendar shift of Canadian Thanksgiving, which was a week later this year. Most Canadian markets reported occupancy declines with Vancouver down 14.8ppts and Toronto down 3.7ppts. Quebec was the only exception, with occupancy up 1.4ppts.
Among the largest countries, Japan, Italy and Mexico were on top. Japan continued to see strong ADR growth. Italy also had a good week with a 13.9% RevPAR increase, driven by a 9.5% increase in ADR. Within Italy, Sicily and Sardinia posted significant gains. Sicily saw occupancy rise 14.9ppts with ADR rising 12.7%. Sardinia recorded a 13.5% ADR increase and a 12.3ppts rise in occupancy due to the ITF tennis tournament.
RevPAR in Mexico increased by 13.5%, all on rate (+15.5%). Markets contributing to the strong ADR gain included Baja California (+25.5%), Mexico City (+15.5%), Yucatan/Campeche (+15.6%), Pacific South (+14.4%).
It was a good week with a variety of performance drivers. Taylor Swift will continue to help the industry with stops in New Orleans and Indianapolis before heading north to Canada. Looking ahead, we foresee a solid October based on Forward STAR data up until Halloween week. It is also important to note that this October has one less Sunday and Monday, which should positively impact RevPAR. November is still looking decent as well with no calendar composition impacts, but there is a shift in Thanksgiving (one week later) and a slowdown during election week.
