STR: US hotel performance positive for October
21 NOVEMBER 2013 7:49 AM
The U.S. hotel industry’s occupancy rose 0.8% to 64.7%; its ADR was up 3.3% to $113.48; and its RevPAR increased 4.1% to $73.48.
HENDERSONVILLE, Tennessee—The U.S. hotel industry reported positive results in the three key performance metrics during October, according to data from STR, parent company of Hotel News Now.
Overall, the U.S. hotel industry’s occupancy slightly rose 0.8% to 64.7%; its average daily rate was up 3.3% to $113.48; and its revenue per available room increased 4.1% to $73.48.
“Room demand in October increased by only 1.5% to 98.6 million rooms sold, well below the 2.1% year-to-date average,” said Jan Freitag, senior VP at STR. “Two reasons for the demand softness were likely the government shutdown between 1 October and 16 October, and Hurricane Sandy made landfall at the end of October 2012. In addition, demand comparables on the East Coast were probably tougher.”
Group ADR increased 3.1%, and transient ADR increased 3.5%, Freitag said. At the same time, group occupancy continued to decline by approximately 3%, he said.
Among the top 25 markets, Minneapolis experienced the largest occupancy increase for the month, rising 7% to 74.6%, followed by Boston (+6.2% to 86.1%), and Nashville, Tennessee (+6.2% to 74.5%). Washington, D.C., saw the largest occupancy decrease, falling 6.7% to 67.4%.
Oahu Island, Hawaii, jumped 11.6% in ADR to $201.12, which was the largest increase in that metric. St Louis followed, with a 9.5% increase in ADR to $98.05, while Houston’s ADR increased 8.4% to $106.09. Denver reported the largest ADR decline, with a 3.3% drop to $109.62.
Six of the top 25 markets experienced RevPAR increases of more than 10%: Boston (+14.8% to $171.69); Nashville (+14.7% to $83.06); Houston (+13.4% to $77.15); St Louis (+12.6% to $65.36); Dallas (+11% to $68.81); and Minneapolis (+10.5% to $81). Chicago posted the largest RevPAR decrease, dropping 5.5% to $105.25, followed by Washington, D.C., with a 5% decline to $108.84.
“Supply and demand growth (for the top 25 markets) mirrored the U.S., with the notable exception that supply growth was ‘only’ 0.6% versus 0.7% for the U.S.,” Freitag said. “This is an indicator that the room growth happens in secondary and tertiary markets, mostly coming from limited-service hotels.”