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The US hotel industry sold more room nights on Fridays and Saturdays than it did on Saturdays Labor Day weekendIt surpassed the record set in 2021.
It was a strong finish to a summer travel season that benefited from strong leisure demand, despite travel ups and downs, inflation and general economic uncertainty.
During the 15-week summer travel season, weekday demand in the US was the third best since 2000 – behind 2019 and 2018. Compared to 2019, demand was 2.8% lower as US hotels sold an average of 777,500 fewer room nights each week. Summer occupancy averaged 68.3%, down from 72.3% in 2019.
The weekly show also bodes well for the fall travel season, especially as demand for group hotels continues to grow.
Airport inspections by the Transportation Security Administration show Americans are flying back to pre-pandemic levels, with the seven-day average through Sept. 9 remaining within 5% of this time in 2019.
U.S. hotel occupancy was 76% over the Friday and Saturday Labor Day weekend, the highest in the past four weeks and the same as weekend occupancy during the summer. Room demand — the number of room nights sold — was up 1.2% from the same week in 2019 and the highest on record over Labor Day weekend, according to data from STR, a CoStar hospitality analytics firm. All comparisons are separate for holiday calendars.
But week-over-week, unit demand continued to decline, down 3.3% from the previous week. A weekly decline in demand is typical for this time of year as the summer winds down, but demand has fallen sharply in past years — by an average of 4.8% in the week leading up to the Labor Day holiday.
For the full week, US hotel occupancy was 62.8%, down 2.1% for the week, but up 1.7% from a year ago.
Demand and availability drop sharply ahead of the holiday weekend. From Sunday to Thursday, demand fell by more than 8% and occupancy fell by 5% for the week. Weekdays and shoulder days combined were 57.6%, the weakest since Memorial Day week.
The nominal average daily rate was flat for the week and up 10% from the same week in 2021. Weekly nominal revenue per unit decreased 3.4% per week, but increased 13.2% compared to 2021.
Adjusted for inflation and compared to the same week of Labor Day weekend 2019, real ADR and RevPAR were down 1% and 7%, respectively.
The weekend nominal ADR rose 5.6% on the week, the biggest gain in 27 weeks. Weekly nominal RevPAR was strong with 94 percent of markets above 2019 levels, but that didn’t change the Labor Day holiday. By doing this and adjusting for inflation, they had a third market weekly RevPAR over 2019. Looking specifically at the holiday weekend, more than half of all hotels had real weekend RevPAR over Labor Day weekend 2019.
Twenty-five US hotel markets had their highest summer demand on record. Those markets include Atlanta, Austin, Charlotte, Dallas, Miami and Nashville.
While demand was at record levels, catch-up was not. For example, Atlanta’s 2022 summer residence was eighth best and Austin’s was 12th best. New York had the sixth-best summer in terms of unit demand, ranking 18th over the last 23 years. Not surprisingly, summer ADR and RevPAR peaked in 2022 but ranked fourth and sixth respectively when adjusted for inflation.
Market weekends ranged from 93% in Colorado Springs to 53% in South Louisiana, with most of the 166 STR-defined markets above 70%. A third of all markets reported more than 80% occupancy over the Friday and Saturday Labor Day weekend.
New York City led 25 markets with a 92.6% increase over the weekend at the US Open. This is the highest weekend occupancy in the city since the outbreak began.
Twelve of the top 25 markets reported more than 80% occupancy over the weekend, including Boston, Chicago, Denver and Los Angeles. For Chicago, it was the second-highest weekend since March 2020. Another 11 of the top 25 markets reported weekend occupancy above 70 percent but below 80 percent. Among the top 25, only the Houston and Phoenix hotel markets reported below 70 percent. Overall, the Top 25 market weekend was 79 percent, the highest level since late July.
For Sunday through Thursday, seven markets reported more than 70 percent occupancy, including Boston at 75 percent and New York City at 77 percent. Denver was closest to that mark at 69 percent.
For the entire week, Alaska had the highest occupancy rate at 82%, followed by New York City at 81%. Boston and Denver hotels also had a good week, averaging 79% and 75% occupancy, respectively. While San Francisco wasn’t at the top of the list, its occupancy rate was strong at 68 percent.
Ten of the top 25 markets reported weekly occupancy above 65% for the week, with New Orleans at 46%. However, New Orleans weekend occupancy improved significantly to 72 percent, the highest over the past nine weeks, but lower than the 84 percent achieved over the 2019 Labor Day weekend.
Weekend ADR in 17 U.S. hotel markets rose more than 20 percent, led by New Orleans, with rates up 55 percent for the week. The New York City and Atlanta markets also reported strong week-over-week gains of more than 25% in nominal ADR.
At the property level, 103 hotels reported a weekend nominal ADR of more than $1,000 — up from 29 during Labor Day weekend in 2019. In the year Of the hotels that were open during Labor Day weekend 2019 and were still open this Labor Day weekend, 59% reported an actual weekend ADR rating higher than 2019.
Isaac Collazo is VP Analytics at STR.
This article represents an interpretation of data collected by CoStar hospitality analytics firm STR. Please feel free to contact the editor with any questions or concerns. For further STR data analysis, Visit the Data Insights blog at STR.com.
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