US weekly hotel room demand peaks
Demand for hotel rooms in the United States has reached its seasonal peak with more than 28.4 million rooms sold in the week ending July 23 — the most since mid-2019.
Weekly room demand was also in the top 10 for the past 22 years, according to data from STR, CoStar’s hotel analytics firm. The U.S. hospitality industry sold 301,000 more room nights than the previous week, the biggest week-over-week increase for this week since 2011.
This annual peak in demand was expected because it has occurred during this week – week 30 – in 15 of the past 22 years. Although strong, it wasn’t the best week 30 ever. That honor remains with 2019 when 29.4 million rooms were sold. This year’s result, however, will be the fourth best for that particular week.
U.S. hotel occupancy also hit a pandemic-era high of 72.8%, the highest level since early August 2019.
Pricing power continued to strengthen, with the nominal average daily rate rising less than 1% week over week to $158.79 – the second highest nominal level recorded by STR since 2000, and only 69 cents less than the record set at the start of the year.
Nominal ADR increased by 16% compared to the comparable week in 2019 and by 11% year-on-year. At $115.59, nominal revenue per available room increased 2% week-over-week and 13% from 2021 to the highest weekly amount ever recorded by STR. Compared to 2019, the nominal weekly RevPAR is 9% higher.
Adjusted for inflation, RevPAR was still the highest in the pandemic era, but only ranked 26th in weekly levels since 2000.
Weekly real RevPAR exceeded 2019 levels in 75 of the 166 markets defined by STR. A week ago, 58 markets had achieved this.
Over the past 28 days, 65 markets are at the “peak” of real RevPAR – above 2019 levels – and another 93 are in “recovery”, between 80% and 100% of 2019 levels.
A week ago, weekday demand – Monday to Wednesday – from the 25 largest markets led to the resurgence in demand. For the week ending July 23, growth was driven by weekend demand outside the top 25 markets.
Overall weekend occupancy was 79%, the fifth highest in the pandemic era. Weekday occupancy was 73%, the highest in the pandemic era.
Demand for weekday rooms was also the highest since March 2020. Weekday occupancy in the top 25 markets remained above 75% for a second consecutive week. Central business districts also had solid weekday occupancy at 74%, but lower than a week ago.
All but six markets reported weekly nominal ADR above 2019 levels. Even more remarkable, inflation-adjusted real ADR was the ninth highest since weekly calibration began. The high was reached earlier this year, following pent-up holiday celebrations. Three markets – Orange County (Anaheim), Oregon Region and San Diego – reported their highest real ADR ever, and 104 markets had higher real ADR than 2019 for the comparable week.
Weekly demand for hotel rooms was also the highest in the pandemic era in 21 U.S. markets, including Charlotte, Los Angeles, San Jose and Portland, Oregon. Additionally, six markets – mostly smaller such as Portland, Maine; but including Charlotte – set an all-time high for weekly demand.
Although most markets did not break previous weekly highs, the strength in demand was widespread, leading to impressive occupancy levels.
Alaska again led all markets with the highest weekly occupancy at 92%. It has held the top spot for five of the last seven weeks. Weekly occupancy was also well over 85% in San Diego, Oahu and Portland, Maine. Overall, 26 markets had a weekly occupancy rate above 80%, and 78 others between 70% and 80% occupancy. Combined, this is the highest number of markets with 70% or more occupancy since summer 2019.
At 56%, New Orleans had the lowest weekly occupancy rate of any market. This is abnormally low for this market. In 2019, during the comparable week, the occupancy rate was 67%; and in previous years it was over 70% for the week.
The top 25 markets also had a strong week with 75% occupancy, the third highest in the pandemic era. San Diego topped the top 25 markets with an occupancy rate of 87%, but nearly all of the top 25 had occupancy rates above 70% for the week. Occupancy exceeded 80% for the second consecutive week in New York, Boston, Denver, Orange County (Anaheim) and Seattle.
The group’s demand, the base of the 25 leading markets, is also sustained and exceeds 1.8 million rooms for a second consecutive week in luxury and upscale hotels.
At the property level, 42% of hotels report a weekly occupancy rate above 80%. Although strong, it was still lower than the percentage of hotels reporting this level of occupancy in the comparable week of 2019 (52%). Occupancy was below 60% at 22% of US hotels, which is slightly better than a year ago.
Upscale and upper midscale hotels continued to excel, with both chains posting their highest ever weekly demand. The upper mid-range exceeded record demand set just a week earlier. A third of all rooms sold this week among branded hotels were in the upper-middle-range chain scale, where demand was 6.3 million. Upscale hotels sold 4.8 million rooms during the week.
Isaac Collazo is vice president of analytics at STR.
This article represents an interpretation of data collected by CoStar’s hotel analytics company, STR. Feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data analysis blog at STR.com.
Return to the Hotel News Now home page.