U.S. Hotel Occupancy, RevPAR, and ADR Decline in October 2019

"With October’s RevPAR decrease of 1.2 percent, there’s more evidence for a pronounced slowdown on the horizon," said STR’s SVP of Consulting and Analytics Carter Wilson.

Out of the Top 25 Markets, Boston saw the steepest decline in RevPAR in October 2019 compared to the previous year, mostly because of the largest drop in occupancy.
Out of the Top 25 Markets in the United States, Boston saw the steepest decline in RevPAR in October 2019 compared to the previous year, mostly because of the largest drop in occupancy.

HENDERSONVILLE, Tenn. — The U.S. hotel industry reported negative results in three key performance metrics during October 2019, according to data from STR. In a year-over-year comparison with October 2018, occupancy declined 0.8 percent to 69.3 percent, average daily rate (ADR) dropped 0.5 percent to $133.34, and revenue per available room (RevPAR) fell 1.2 percent to $92.35.

“The industry had not reported consecutive months of RevPAR decreases since December 2009 and January 2010,” said Carter Wilson, STR’s senior vice president of consulting and analytics. “We considered the three previous sub-0.5 percent monthly declines in this record-setting expansion cycle as blips. With October’s RevPAR decrease of 1.2 percent, there’s more evidence for a pronounced slowdown on the horizon. As noted in our revised forecast, we’re projecting RevPAR increases below 1 percent for 2019 and 2020. The industry has not been below 2.9 percent growth for a year since the recession.

“With October specifically, group occupancy was down 8.6 percent,” Wilson continued. “That’s in large part because of the Jewish holiday calendar shift from September in 2018. With slower demand growth and the industry’s first supply increase of at least 2.1 percent since April 2010, there was obvious pressure on occupancy levels and already fragile pricing confidence.”

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Market-Specific Performance

Among the Top 25 Markets, as defined by STR, Anaheim/Santa Ana, Calif., registered the largest jump in RevPAR in October 2019—up 6.1 percent to $138.20. Washington, D.C.-Maryland-Virginia, posted the largest lift in ADR (up 5.5 percent to $184.27), which resulted in the second-largest increase in RevPAR (up 5.2 percent to $142.95). Houston experienced the highest rise in occupancy in October 2019—up 5.3 percent to 68 percent.

Boston saw the steepest decline in RevPAR in October 2019 (down 11.8 percent to $191.12), mostly because of the largest drop in occupancy (down 7.1 percent to 83.1 percent). New Orleans reported the steepest decrease in ADR (down 5.7 percent toS$161.23) and the only other double-digit decline in RevPAR (down 10.4 percent to $118.65) in October 2019.

Overall, RevPAR across the Top 25 Markets dropped 2.4 percent in 12 of the past 13 months. In aggregate, the top markets have underperformed all other markets, where RevPAR declined 0.4 percent, according to STR.

 


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