Continuing the momentum from the end of last year, RevPAR growth accelerated in the first quarter of 2018. Occupancy levels continued to increase due to accelerating demand growth and decelerating supply growth, with pricing power appearing to finally begin to return to Manhattan hotels. RevPAR increased 7.4 percent, driven equally by increasing occupancy and average daily rate (“ADR”) levels.
A combination of continued strength in lodging demand and a slowing of supply growth to 2.8 percent, the lowest supply increase since Q1 2015, led to a 3.7 percent year-over-year increase in occupancy levels. Q1 2018 may prove to be a turning point for Manhattan hotels, with pricing power finally returning. Hotels experienced a 3.5 percent increase in ADR, the highest since Q3 2014. Overall, revenue per available room (“RevPAR”) increased by 7.4 percent, the first Q1 increase in RevPAR levels since Q1 2013.
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