U.S. Hotel Performance Cools a Bit in the Leadup to Summer
By STR
U.S. hotel industry performance slowed a bit more than expected in the four weeks ending 17 June 2023. That period, which spanned the slower business time around Memorial Day but also the start to the leisure-centered summer travel, produced flat demand and occupancy compared to the previous version of this “bubble chart” series. At the same time, gains in average daily rate (ADR) continued to level down.
Before diving into market specifics, it is important to note that one flat performance period does not signal an alarming trend. Recent demand trends have shown a healthy return, particularly in weekday/business travel. Still, we are reminded of the importance of continuing to monitor the industry with the context of with macroeconomic conditions, such as domestic vs. international travel, inflation and labor challenges.
Four weeks ending 17 June 2023:
- Occupancy came in at 66.0%, which was unchanged from the previous four weeks.
- Occupancy was down 1.9 ppts from the matching period in 2022.
- Occupancy was down 3.8 ppts from the 2019 comparable of 70.2%, a steeper deficit than last month’s long-term comparison (-3.1 ppts).
While the rate of new rooms in construction has flattened since the pandemic, it is worth adding that modest supply growth of 2.7% from the matched period in 2019 adds to that occupancy deficit against pre-pandemic times.
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