U.S. hotels have now posted 100 consecutive months of year-over-year revenue per available room (RevPAR) growth, according to data conducted by STR. Additionally, each of the key performance metrics are at record highs on a 12-month moving average.
In a year-over-year comparison with June 2017, the industry posted the following:
- Occupancy: +1.7 percent to 74.5 percent
- Average daily rate (ADR): +2.8 percent to $132.66
- RevPAR: +4.6 percent to $98.85
“The industry’s 117 million room-nights sold were the most we have ever recorded for a June,” said Jan Freitag, STR’s senior VP of lodging insights. “This drove the strongest year-over-year demand and occupancy increases of 2018. Even this far into the expansion cycle, brands and hoteliers were able to attract 4.2 million more guests than last June. This clearly points at very healthy group, business transient and leisure demand, supported by still-undeterred GDP growth and low unemployment numbers.”
Orlando, Fla., registered the largest increases in each of the three key-performance metrics: occupancy (+6.1 percent to 83.3 percent), ADR (+10.2 percent to $127.86) and RevPAR (+16.9 percent to $106.48).
Houston experienced the second-highest jumps in occupancy (+6.0 percent to 65.0 percent) and RevPAR (+11.3 percent to $66.92).
“With summer in full swing, the top 25 markets were busy as well,” said Freitag. “In fact, seven of the markets saw occupancy at or above 85 percent, which is likely due to a confluence of meetings late in the meeting cycle in addition to the usual summer-vacation demand.”
Overall during the second quarter, U.S. hotel occupancy rose 1.1 percent year-over-year to 70.2 percent, ADR increased 2.9 percent to $131.02 and RevPAR rose 4 percent to $91.94.
Demand (room nights sold) grew 3.1 percent year-over-year, while supply (room nights available) increased 2 percent for the second-consecutive quarter. Overall, each of the key-performance metrics were the highest for any second quarter on record.
“The second quarter of 2018 was another record-breaker as the industry rolled to 100 straight months of RevPAR growth,” said Bobby Bowers, STR’s senior vice president of operations. “Even though there was a slight artificial lift from the Easter calendar shift at the beginning of the quarter, second-quarter RevPAR growth accelerated from what we saw in first quarter [+3.5 percent]. The industry continues to benefit from demand across the travel segments, as well as favorable macroeconomic conditions.”
San Francisco/San Mateo, Calif., was the only top 25 market to show a double-digit increase in RevPAR (+10.4 percent to $203.84), due to the only double-digit jump in ADR (+10.1 percent to $238.09). Bowers notes the market’s performance has received a conference-related demand boost since the reopening of the Moscone Center.
