U.S. hotel performance comparisons to 2019 weakened in the last week of April, indicating recovery from the pandemic is still very much an ongoing concern.
For the week ending May 1, U.S. hotel revenue per available room was slightly less than 65% of the level achieved in the same week in 2019 — the lowest index to 2019 of the past seven weeks and marking the second straight week in which the index has dropped by more than two points, according to STR’s latest Market Recovery Monitor data. The week prior, RevPAR was 67.3% of the 2019 level.
In 2019, the U.S. hotel industry had reached a peak, with performance at the highest levels ever achieved — setting the benchmark for the return to pre-pandemic “normal.”
STR’s Market Recovery Monitor, which places U.S. hotel markets in one of four categories based on weekly RevPAR performance indexed to 2019, shows that 36% of markets are in “recovery” with RevPAR at least 80% of 2019 levels. That is up from 31% of markets in each of the past two weeks.
However, the percentage of U.S. markets in the “peak” category — with RevPAR at 100% or better of 2019 levels — dropped for the week from 20% to 17%.
The number of U.S. markets in the “depression” category — with RevPAR at 50% or less of 2019 levels — also increased from 17 to 18. Among the top 25 markets in terms of size, New York, San Francisco and Boston are at the bottom in terms of performance indexed to 2019, with each posting RevPAR for the week ending May 1 that was less than 25% of the level achieved in the same week in 2019.
U.S. hotel industry performance overall remains in the “recession” category, with RevPAR between 50% and 79.9% of the 2019 benchmark.
Total U.S. RevPAR indexed to 2019 is still in the recession category and at its lowest level of the past seven weeks.
U.S. hotel occupancy remained just above 57% for the week ending May 1, and despite a slight decline in room demand, more than 21 million rooms were sold for the seventh-consecutive week.
Weekday hotel room demand was down for the week, while weekend occupancy was up 1.1% to 71%. Saturday room demand was the highest recorded since Feb. 15, 2020, with 73% of U.S. hotel rooms occupied.
A sample of urban hotels in Top 25 markets with a heavy reliance on corporate business demand showed a week-over-week decline in occupancy, to 41% from a four-week average of 44%.
Overall, weekday demand fell across the U.S. with only 43% of markets reporting demand growth week over week, compared to 51% a week ago. Orlando, Dallas and Cleveland — which got a boost from hosting the NFL Draft — had the largest weekly demand increase.
More than half of all hotels in STR’s data set posted weekly occupancy above 60%. There were still nearly 3,000 hotels — 8% of all reporting hotels — with occupancy below 30% for the week.
Of the hotels with occupancy at or below 30%, 41% were in small metro and suburban locations outside of the top 25 markets.
Large hotels, with 300 or more rooms, have made significant progress toward recovery. At the beginning of February, 70% of large hotels reported occupancy below 30% countrywide. In the most recent week, only 30% of large hotels reported occupancy below that threshold.
U.S. hotel industry average daily rate hit a three-week high of $109 for the week ending May 1, growing by 0.6% week over week — and up by more than 1% for the weekend. However, ADR was only 82% of the level achieved during the same week in 2019 — the lowest index of the past six weeks.
The recovery will continue, but dramatic, widespread gains are not expected until summer demand starts to kick in later into May and June.
Isaac Collazo is VP Analytics at STR.
This article represents an interpretation of data collected by CoStar’s hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.