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Hotel Boom Times Slowing Down


It’s certainly not lights out, but the U.S. hotel market is showing signs of its first major slowdown after an unprecedented, multi-year growth streak across all categories. According to STR Global, the U.S. hotel industry reported negative year-over-year results in three key performance metrics during the tail end of April.

Strictly focused on the week of April 21-27, 2019, STR reports overall occupancy was down 1.4 percent to 68.9 percent, which is still a very healthy number in light of all the new hotel construction in the previous decade. In addition, the average daily rate (ADR) also declined 1.4 percent, down to an average bill of $128.66, which of course is a reflection of the vast number of economy-focused rooms, which have also expanded across the board in recent years.

STR analysts attribute performance declines in many major markets to group business decreases on Easter Sunday and the Monday that followed. The corresponding days from 2018 were non-holiday dates, which certainly had an impact on the numbers.

Looking at the top 25 U.S. hotel markets, Norfolk/Virginia Beach, Virginia, registered the only double-digit jump in RevPAR—industry lingo for revenue per available room. Those Virginia numbers spiked 30.6 percent to an average of $87.61. This was due to the largest rise in occupancy, up 6.9 percent to 74.6 percent. Miami/Hialeah, Florida, came in second by posting the second-largest increases in ADR (+11.8 percent to $226.76) and RevPAR (+8.6 percent to $184.32).

Washington, D.C.-Maryland-Virginia, reported the steepest decrease in RevPAR (-20.3 percent to $122.03), primarily due to the largest decline in ADR (-13.2 percent to $161.35). The market registered the second-largest drop in occupancy (-8.1 percent to 75.6 percent). Detroit experienced the only double-digit decrease in occupancy (-10.5 percent to 70.9 percent). Chicago saw the second-steepest declines in ADR (-12.6 percent to $128.47) and RevPAR (-16.9 percent to $89.25).

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Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
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