Weekly demand for hotels in the United States is the highest in three years

There are no signs that the recovery momentum of the US hotel industry is being slowed by travel issues or economic concerns, as demand for hotel rooms hit a three-year high in the latest weekly results.

Despite high gas and airfare prices, TSA airport screenings on June 26 hit the highest seven-day average since March 2020, and hotel occupancy across the United States for the week ending June 25 was 72.3% – the highest level since August 2019.

That momentum is expected to continue into July, with hotel analytics firm CoStar STR predicting that the U.S. hotel industry will continue to set pandemic-era records for demand, occupancy, average daily rate and revenue per available room.

Occupancy rose for a third consecutive week, up 0.5 percentage points from the previous week and up 2.6 percentage points from a year ago.

US hotels sold 28.2 million rooms during the week. Demand for rooms has been over 28 million over the past two weeks. In all of 2019, demand exceeded this level seven times, but the most recent week’s result was still 1.3% lower than the comparable week of 2019.

The nominal average daily rate rose 1.1% week-over-week to $157, which was the second-highest reading since weekly reporting began, behind only New Year’s week 2022 ( $159). Nominal ADR was 17% higher than the comparable week of 2019 and 17% – or $23 – higher than a year ago.

Nominal revenue per available room reached a 22-year high of $114 – 12% higher than the corresponding week of 2019 and up 21% from 2021.

Not only was demand for the week the best of the pandemic era, it was also the 15th highest of any week since 2000. Of the 25 highest demand records, two occurred this year and over the past two weeks.

The highest weekly demand on record occurred during the week ending July 20, 2019, when 29.6 million rooms were sold. Additionally, for the weeks ending in June, this week’s result was the fifth highest since STR began evaluating weekly performance.

Demand growth was driven by upscale and upscale hotels. Both on-chain scales reported the highest weekly room demand in 22 years, surpassing the record each set a week earlier.

Twenty-two markets — including Nashville, Portland and Seattle — set demand records in the pandemic era. Sixteen others – including Chicago, Dallas, Denver, New York and San Diego – reported their second highest demand since March 2020. Five markets – mostly smaller like Allentown / Reading, Pennsylvania and Greenville / Spartanburg, South Carolina – reported their highest weekly demand with demand dating back to 2000. Nashville was the major market to appear in this group with its highest weekly demand since STR began assessing weekly levels. In the comparable week of 2000, demand in Nashville was 155,000, while for that week at the end of June 2022, room nights sold exceeded 315,000 and resulted in an occupancy rate of 81%. Orlando sold the most rooms this week overall at 765,000, its fifth-highest volume since the pandemic began. More strikingly, Orlando’s demand was the highest on record for a week ending in June.

Market occupancy was again led by Alaska at 90%, its third week at the top. The state was followed by Portland, Maine at 89%, Omaha at 87% and New York at 87%. Of the nation’s 10 largest markets, based on supply and excluding Las Vegas, New York had the highest occupancy rate, followed by Orlando (80%) and Chicago (76). %). Overall, 59% of the 166 markets defined by STR reported weekly occupancy above 70%, which was the highest since the start of the pandemic. An occupancy rate above 80% was achieved in 12% of US markets.

Occupancy in the top 25 markets fell slightly from the previous week to 75%, but that percentage was still the second highest level in the pandemic era. In the comparable week of 2019, occupancy in the top 25 markets was 80%, compared to 67% a year ago. Demand in the top 25 markets, however, was the third highest on record for that particular week, with the highest level occurring in 2019. The top 25 was led by New York City, and all but seven markets reported an occupancy greater than 70%. Houston posted the lowest occupancy rate in the group at 59%, but that was slightly higher than a year ago.

Occupancy in central business districts fell for a third straight week to 74% – the third highest level since the start of the pandemic, with the record high coming three weeks ago. Of the 20 Central Business District submarkets, New York’s Financial District had the highest occupancy rate at 89%, followed by Seattle and San Diego at 85% and Nashville at 83%.

Weekday occupancy (Monday-Wednesday) was 71%, down slightly from a week ago. Excluding Monday, the two-day average hit 74% and was the highest since the start of the pandemic. Weekend occupancy (Friday and Saturday) was 81%, a pandemic-era high and the third highest since March 2002. Daytime, Wednesday and Thursday occupancy was the highest since March 2020 at 75% and 74%, respectively. The 25 major markets and central business districts hit pandemic-era occupancy heights from Wednesday to Friday.

The nominal ADR for the week was at the second highest level on record. On an inflation-adjusted basis, real ADR was the 15th highest since 2000 and the second highest since the start of the pandemic. Fifteen markets reported their highest real ADR since the start of the pandemic, including Denver, San Diego and Seattle. Twenty-two markets set true ADR records for June, including Tampa at $144 and Orlando at $132.

In each of the past three weeks, nominal RevPAR hit pandemic-era highs of $110 to $114. The previous all-time high of $107 was set during the week ending July 28, 2018. Real RevPAR also hit a pandemic-era high of $99 and topped each of the past three weeks. . While weekly real RevPAR was the highest in the current era, it ranked 37th since 2000 with a record topping $109 in the week ending July 23, 2016.

At the market level and adjusted for inflation, 95 markets had “peak” RevPAR, exceeding 2019 levels, including Austin, Dallas, New Orleans and San Diego. Over the past four weeks, 67 markets were at the “peak” of actual RevPAR, including Austin, Miami, Orlando, Phoenix and San Diego. Eighty-eight markets are still in the “recovery” category, with real RevPARs between 80% and 100% of 2019 levels. Only 11 markets remain in “depression”, with real RevPARs between 50% and 80% of 2019.

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 insights blog at STR.com.

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Sandy A. Greer