Summary:
- Latest data from STR shows the US hotel industry returned to return to 'normal' In Oct-2018 with a monthly demand record and healthy RevPAR growth;
- Occupancy rates of US hotels increased +0.8% year-on-year to 69.9%. ADR grew +2.7% to USD133.81 and RevPAR increased +3.5% to USD93.55;
- Hotels across Central and South America showed mixed performance with occupancy levels down -1.6% to 59.2%, but rises in ADR (+13.1%) and RevPAR (+11.3%).
Its data shows occupancy rates of US hotels increased +0.8% year-on-year in Oct-2018 to 69.9%. Average daily rates (ADRs) grew +2.7% to USD133.81 and revenue per available room (RevPAR) increased +3.5% to USD93.55.
For the 10M ending Oct-2018, US hotel occupancy rates were up +0.5% year-on-year to 67.9% while ADR increased +2.6% to USD130.75. Unit revenues per room grew by +3.1% to USD88.78.
"October provided a nice return to 'normal' with a monthly demand record and healthy RevPAR growth driven primarily by ADR," said Jan Freitag, STR's senior VP of lodging insights. "The further we move away from September, the less impacted by volatile hurricane-induced demand the monthly data becomes. "
Mr Frietag remarked that at YE2018, all KPIs should reach the highest levels the industry has seen; however, the pace of growth will continue to slow. STR's projected ADR increases are only in line with inflation rates, which "unfortunately is not good news for profit growth expectations".
The data show that New Orleans, Louisiana posted the only year-on-year double digit rise in occupancy for Oct-2018. The city's occupancy rates increased +10.2% to 77.1%. New Orleans also posted the largest increase in RevPAR of +17.4% to USD131.98.
San Francisco/San Mateo, California, posted the highest lift in ADR (+7.3% to USD276.19), while Norfolk/Virginia Beach, Virginia, saw the second-largest increases in occupancy (+8.5% to 65.7%) and RevPAR (+14.6% to USD61.95). Overall, 19 of the USA's top 25 markets reported year-on-year RevPAR growth during the month.
Due to comparison with the post-Hurricane Harvey demand period of 2017, Houston, Texas, reported the largest decreases in each of the three key performance metrics: occupancy (-22.8% to 64.7%), ADR (-7.7% to USD108.09) and RevPAR (-28.8% to USD69.94). Tampa/St. Petersburg, Florida, saw the only other double-digit decreases in occupancy (-10.1% to 66.7%) and RevPAR (-10.0% to USD78.95), while Washington, D.C.-Maryland-Virginia, reported the second-largest decline in ADR (-4.5% to USD174.65).
Hotels across Central and South America showed a mixed performance during the same month with occupancy levels down -1.6% to 59.2%, but strong year-on-year rises in both ADR (+13.1% to USD109.56) and RevPAR (+11.3% to USD64.91).
In the Colombian capital, Bogota, rates rose despite lower occupancy (down -7.8% to 61.0%). The decline in occupancy came as supply (+4.4%) outpaced demand (-3.7%) for the third consecutive month - ADR rose (+3.0%) and RevPAR fell (-5.0%) versus the same month last year. STR analysts note that occupancy and ADR levels were higher than usual during the Latin American and Caribbean Agriculture congress.
Meanwhile, in Sao Paulo, Brazil, a mixed Oct-2018 performance was attributed by STR analysts to Paulo to corporate demand and group events being pushed to September to avoid the election period. Its data shows occupancy levels slipping -5.2% to 64.2%, ADR rising +4.5% to BRL362.61 and RevPAR falling -1.0% to BRL232.71.