U.S. hotel occupancy reached 58.7%, up 4.5 percentage points (ppts) compared to the prior week as holiday leisure travel kicked in along with the return of end-of-year business and convention travel. Occupancy, however, was down 0.7 ppts versus last year. Average daily rate (ADR) increased 4.5% year over year (YoY), resulting in a 3.3% increase in revenue per available room (RevPAR). ADR has been driving RevPAR growth for most of 2023 even as occupancy has slipped. This is more evidence of hoteliers continuing to price with a focus on margins rather than occupancy.
Article - Weekly Global Hotel Performance Trends from STR: 3 - 9 December 2023 - Global Occupancy, Excluding the U.S., Moved to 66.5%, Up 5.3ppts YoY and Flat from the Previous Week. Occupancy is Trending in Line with Pre-pandemic Norms As 2017, 2018 and 2019 All Showed a Similar Slowdown of Occupancy from Mid-November Toward the End of the Year.
In the week ending 4 February 2023, occupancy fell one percentage point (ppt) week over week (WoW) to 55.4%. The drop was not unexpected given previous history, and more importantly, the decrease was less than what we anticipated based on long-term trends. Weekly demand remained robust and above 21 million for the fourth consecutive week. At this point in 2019, weekly demand had only been above that level for three straight weeks.
Leisure travel continues to be particularly strong in the U.S. as spring kicks into gear, and the biggest hotel performance wins recently have come in those U.S. markets that are traditional Spring Break destinations. At the same time, major urban centers are seeing some return of transient business demand along with increases in group bookings.