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STR: U.S. hotel performance for September 2018

HENDERSONVILLE, TENNESSEE – The U.S. hotel industry reported mixed results in the three key performance metrics during September 2018, according to data from STR.

In a year-over-year comparison with September 2017, the industry posted the following:

  • Occupancy: -2.1% to 68.0%
  • Average daily rate (ADR): +1.9% to US$131.00
  • Revenue per available room (RevPAR): -0.3% to US$89.10

The slight dip in RevPAR broke the industry’s 102-month streak of year-over-year growth in the metric. That run, which began in March 2010, was the longest on record.

“Very important to state, this is not the beginning of a downturn,” said Jan Freitag, STR’s senior VP of lodging insights. “The industry smashed the monthly demand record last September because of the rush of post-hurricane business in Houston and parts of Florida. That created a level of demand that the industry fell just short (-0.1%) of matching this September. In fact, that slight dip in demand was the first year-over-year decline in the metric since August 2015.

“When you look past the monthly year-over-year comparison, you will see that each of the key metrics were well above the long-term average for September and just barely ahead of the 2018 year-to-date average. The industry remains on solid footing even as RevPAR growth slows. We’ll release our final forecast revision of the year in the coming weeks with continued growth projected through 2019.”

Among the Top 25 Markets, San Francisco/San Mateo, California, registered the largest increase in RevPAR (+13.3% to US$239.64), due to the only double-digit lift in ADR (+13.6% to US$274.69).

Miami/Hialeah, Florida, experienced the highest rise in occupancy (+8.7% to 64.2%).

Phoenix, Arizona, posted the second-largest increases in each of the three key performance metrics: occupancy (+5.1% to 63.7%), ADR (+6.6% to US$110.37) and RevPAR (+12.1% to US$70.26).

Overall, 13 of the Top 25 Markets reported RevPAR growth.

Houston, Texas, reported the largest decreases in each of the three key performance metrics: occupancy (-30.8% to 59.1%), ADR (-7.7% to US$105.75) and RevPAR (-36.2% to US$62.48). Houston’s hotel performance was lifted in the weeks and months that followed Hurricane Harvey in 2017 as properties filled with displaced residents, relief workers, insurance adjustors, media members, etc.

Orlando, Florida, saw the only other double-digit declines in occupancy (-11.6% to 67.2%) and RevPAR (-12.5% to US$73.95).

U.S. hotel performance for Q3 2018
The U.S. hotel industry reported mixed year-over-year performance results during Q3 2018.

Compared with Q3 2017:

  • Occupancy: -0.4% to 71.0%
  • Average daily rate (ADR): +2.1% to US$131.86
  • Revenue per available room (RevPAR): +1.7% to US$93.65

Demand (room nights sold) grew 1.6% year over year, while supply (room nights available) increased 2.0% for the third-consecutive quarter.

“Because of the comparison with the post-hurricane demand period of 2017, September broke the industry’s 102-month stretch of consecutive RevPAR increases and ultimately pulled down growth for the quarter as a whole,” said Bobby Bowers, STR’s senior VP of operations. “Actually, that 1.7% rise in RevPAR was the lowest for a Q3 since the current growth cycle started in 2010. Regardless, growth is growth, and overall industry performance remains in good shape with our forecast calling for growth through at least 2019.”

Phoenix, Arizona, experienced the largest increases in occupancy (+4.8% to 61.1%) and RevPAR (+9.3% to US$57.55).

San Francisco/San Mateo, California, posted the highest lift in ADR (+8.3% to US$257.03).

Philadelphia, Pennsylvania-New Jersey, saw the second-largest increases in occupancy (+4.4% to 75.1%) and RevPAR (+8.2% to US$98.57).

Overall, 18 of the Top 25 Markets registered an increase in RevPAR.

Houston, Texas, reported the quarter’s steepest declines in each of the three key performance metrics: occupancy (-11.2% to 59.8%), ADR (-2.1% to US$100.30) and RevPAR (-13.1% to US$59.94).

Washington, D.C.-Maryland-Virginia, posted the only other decrease in ADR (-0.8% to US$142.80).

In absolute values, New York, New York, ranked first in occupancy (89.8%), ADR (US$261.92) and RevPAR (US$235.21).

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