Article Summary: In 2018, the U.S. hotel industry saw occupancy increase 0.5% to 66.2%, according to STR, while ADR rose 2.4% to $129.83 and RevPAR increased 2.9% to $85.96.
In 2018, the U.S. hotel industry saw occupancy increase 0.5% to 66.2%, according to STR, while ADR rose 2.4% to $129.83 and RevPAR increased 2.9% to $85.96.
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HENDERSONVILLE, Tennessee—The U.S. hotel industry registered record-breaking performance during 2018, according to data from STR.
Compared with 2017:
• Occupancy: +0.5% to 66.2%
• Average daily rate (ADR): +2.4% to US$129.83
• Revenue per available room (RevPAR): +2.9% to US$85.96
The absolute values in those three key performance metrics were each the highest STR has ever benchmarked. The U.S. hotel industry also set records for supply (more than 1.9 billion room nights available) and demand (roughly 1.3 billion room nights sold). Based on percentage growth for the year, demand (+2.5%) outpaced supply (+2.0%).
“As projected in our first 2018 forecast back in January, U.S. hotels had a good, not great year,” said Amanda Hite, STR’s president and CEO. “Operating most of the year in a pretty favorable macroeconomic environment, the industry reached its highest-ever annual occupancy and grew RevPAR for the ninth year in a row—albeit at a rate lower than the long-term average. All classes recorded RevPAR gains, but the Upper Upscale and Upscale segments showed occupancy declines, and we expect this trend to continue throughout 2019.”
Among the Top 25 Markets, Super Bowl LII host Minneapolis/St. Paul, Minnesota-Wisconsin, reported the year’s largest spike in RevPAR (+6.9% to US$82.96), due primarily to the second-highest jump in ADR (+5.8% to US$122.66).
Miami/Hialeah, Florida, posted the largest lift in ADR (+6.1% to US$199.35), which resulted in the second-largest increase in RevPAR (+6.3% to US$152.81).
Philadelphia, Pennsylvania-New Jersey, experienced the highest rise in occupancy (+3.8% to 71.1%) and the third-largest increase in RevPAR (+6.0% to US$94.60).
Overall, 21 of the Top 25 Markets recorded year-over-year RevPAR growth in 2018.
“With absolute occupancy at 73.6%, the Top 25 Markets actually showed a slight occupancy decline as supply growth hit 2.7%,” Hite said. “Luckily those larger markets still command some pricing power as displayed through a 2.7% increase in room rates. It will be interesting to monitor whether or not this can continue given the continued influx of new rooms into those markets.”
Due to a comparison with the effect of Hurricane Harvey in 2017, Houston, Texas, reported the steepest declines in each of the three key performance metrics: occupancy (-5.3% to 63.1%), ADR (-2.4% to US$105.45) and RevPAR (-7.5% to US$66.57).
Washington, D.C.-Maryland, posted the only other decrease in ADR (-2.0% to US$156.42), which resulted in the second-largest drop in RevPAR (-3.2% to US$111.51).
In absolute values, New York, New York, recorded the highest levels in occupancy (87.3%), ADR (US$262.31) and RevPAR (US$228.96).
During the fourth quarter of 2018, U.S. hotel occupancy rose 0.4% to 61.9%, ADR was up 2.0% to US$127.95 and RevPAR increased 2.4% to US$79.21.
Among the Top 25 Markets, San Diego, California, registered the largest increase in RevPAR (+12.4% to US$113.92), due primarily to the highest lift in ADR (+7.8% to US$155.74).
Boston, Massachusetts, experienced the largest rise in occupancy (+6.3% to 75.2%) and the second-largest increases in ADR (+5.6% to US$203.71) and RevPAR (+12.2% to US$153.15).
Houston reported the largest declines in each of the three key performance metrics: occupancy (-19.3% to 58.5%), ADR (-7.1% to US$102.26) and RevPAR (-25.1% to US$59.82).
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Headline: STR: US hotels post another record year in 2018
Article Date: 1/18/2019
Article Time: 11:11:00 AM