STR says that seven markets in the Top 25 achieved RevPAR increases above 6 pc YoY
Global hospitality industry has performed pretty much in line with expectations and observed the traditional drop in occupancy rates. However, the drop was lesser than usual in some markets, while in other markets the occupancy rates rose significantly higher, softening the blow for the global industry.
These are the key findings of the latest weekly report prepared by STR, a leading hospitality data aggregator and analyst firm. The analysis comprised 15 nations such as United States, United Kingdom, Spain, Germany, Italy, China, Mexico, France, Canada, Japan, Indonesia, Ireland, Malta and Greece.
US Performance
STR says that the in the United States, hotel industry performance declined, which is typical for the week that contains the Memorial Day holiday. At 61.6 pc, occupancy was down 1.5 percentage points (ppts) year over year (YoY) and 5.1 ppts week over week (WoW).
STR says that based on the previous 20 years, occupancy typically reflects a significant drop for this particular week compared to the previous. In 2019, the week-over-week decline was 6.5 ppts, while the 20-year average is 6.9 ppts.
It adds that, however, last year was unusual with Memorial Day week only dropping 3.3 ppts WoW, creating a more challenging year-over-year comparison this year. Room demand for this Memorial Day week was the third highest behind last year and 2019. Memorial Day was the primary driver of the occupancy decline, falling 21.6 ppts week over week versus 18 ppts last year. This year’s decrease was better than the 20-year average of 26.3 ppts, leading us to reaffirm that 2023 is more and more following pre-pandemic patterns.
STR says that in terms of pricing, the weekly Average Daily Rates (ADR) of USD 150 was down 4.2 pc WoW but up 1.3 pc YoY. Revenue Per Available Room (RevPAR) declined 1 pc YoY to USD 93, driven by the decline in occupancy. Looking at the past four weeks, ADR and RevPAR remain positive compared to last year, up 2.8 pc and 1.4 pc, respectively, but below the rate of inflation of about 5 pc.
At 65.6 pc, occupancy in the Top 25 Markets within the US fared better than the rest of the country, declining only 0.4 ppts YoY compared to a 2 ppt decline outside the Top 25. Occupancy for the rest of the country was 59.4 pc. Top 25 ADR increased 1.8 pc YoY to USD 174, while all other markets experienced a slightly smaller increase of 0.7 pc to USD 136.
STR says that seven markets in the Top 25 achieved RevPAR increases above 6 pc YoY, led by Boston at 18.6 pc, Washington, DC at 15.2 pc and Las Vegas at 14.7 pc.
Global Performance
Excluding the US, the global hotel occupancy for the week was 65.5 pc, down 4.8 ppts WoW due to the Spring Bank holiday in the UK and Europe, says STR. However, occupancy was 6.1 ppts ahead of last year. Weekly ADR grew 12.7 pc to USD 147 with RevPAR of USD 96 up 24.2 pc.
For the top 10 countries by supply, RevPAR was USD 93, a growth of 22.2 pc YoY, driven again by occupancy rise of 7.3 ppts, along with robust ADR growth of 8.9 pc. Occupancy continues to be propelled in a large part by Asian markets, where China and Indonesia recently saw YoY increases in occupancy of 15.4 ppts and 13.4 ppts, respectively. Overall, occupancy in the top 10 attained 66.6 pc, down from 72.4 pc a week ago due to the Spring Bank holiday.
The UK had the highest occupancy of the top 10 countries at 81.2 pc, 5.3 ppts higher than the next country, Italy which was at 75.9 pc. ADR for the top 10 was up 8.9 pc to USD 139. STR says that besides the top 10 countries, three countries posted an occupancy higher than the UK, Ireland at 86.1 pc, which continues to be the world’s highest, Malta at 83.1 pc and Greece at 82.5 pc.
