Weekly STR Insights: May 12-18, 2024

The article examines various aspects of the hotel industry in the USA and some other countries, such as China, Germany, and the United Kingdom, focusing on the indicators and trends observed in the market.

In recent weeks, there has been an increase in revenue per available room (RevPAR) in the United States, as well as a growing demand for hotel services in the upper market segment. Specifically, as of May 18, 2024, RevPAR in the U.S. has increased by2.8%compared to the same period last year. In this increase, the main role belongs to the rise in the average daily rate (ADR), which has increased by2.6%The hotel occupancy rate has also increased by0.1percentage point, reaching67.4%what is the highest load indicator for hotels in 2024, although it still remains below the 2019 level by3percentage points.

Louisville, Kentucky, is a leader among U.S. cities in RevPAR growth.80.7%In annual terms, this is due to the PGA Championship 2024. Considering the Kentucky Derby Week, hotels in Louisville experienced increased demand on weekends. Next year, the championship will move to Charlotte, North Carolina, where the U.S. Open Golf Championship will also take place in June.

Dynamics by hotel levels

If we analyze the dynamics across different levels of hotels, we will obtain the following data:

• For luxury hotels, RevPAR has increased by6%compared to last year;
• The "luxury" segment4.5%;
• The "high-end" segment3.6%;
• “High average” on1.6%.

At the same time, there is a noticeable decline in the economy class segments, where RevPAR has decreased by2.8%with similar declines in both occupancy and ADR.

In the last two weeks, the occupancy rate of economy class has decreased on average by0.5points, while in the previous weeks of the year this figure reached1.5Although it is still early to say that the worst is behind us, the slowing rate of decline is a positive sign. Thus, some experts predict that occupancy in the economy class may improve; however, the results for RevPAR in May may be somewhat misleading.

An important aspect of the time until the end of May is the presence of additional days off, which could have influenced the growth of the indicators.

Group demand continues to grow, especially at the top level of hotels. In the Luxury and Upper Upscale segments, the level of demand has increased by8.5%The days of the week showed the greatest increase in10.3%It's interesting that markets outside the top 25 have shown an even more significant increase in group demand.11.1%, unlike5.4%in top cities.

Global trends

On a global level, there is an improvement in occupancy rates, which have increased by1.2percentage points, reaching70.5%The main achievements were recorded outside of the ten countries with the highest supply. Germany and Indonesia showed the greatest increase in occupancy.8.6and6.5percentage points, respectively. In China, the occupancy rate has decreased compared to last year, but overall the country has not been significantly affected, as the recovery rate has reached71.7%.

Looking ahead, we are entering a time of uncertainty, as economic pressures may impact the hotel market during the summer season. Is it realistic to think that the trend of improving occupancy in the economy segment could herald better times for the entire industry? Expectations based on various economic indicators suggest that the next eight months will be more favorable than the previous four; however, ongoing economic difficulties, especially for travelers with middle and low incomes, could cloud such forecasts.

Thus, based on the analysis conducted, it is evident that the hotel market both in the USA and abroad is showing positive trends, which may herald an active vacation season.

Note: This article is based on data from STR, a company that specializes in analysis and information for the hospitality industry, founded in 1985. STR has offices in 15 countries, including North America, London, and Singapore. In 2019, STR was acquired by CoStar Group.