STR Report: U.S. Hotels Post Another Record Year in 2018
(January 22, 2019) The U.S. hotel industry registered record-breaking performance during 2018, according to data from STR. Compared with 2017, occupancy increased 0.5% to 66.2%; average daily rate (ADR) rose 2.4% to $129.83 and revenue per available room (RevPAR) was up 2.9% to $85.96.
The absolute values in those three key performance metrics each were the highest the Hendersonville, TN-based hospitality industry research company has ever benchmarked. The U.S. hotel industry also set records for supply (more than 1.9 billion room nights available) and demand (roughly 1.3 billion room nights sold). Based on percentage growth for the year, demand (+2.5%) outpaced supply (+2.0%).
STR’s Amanda Hite says, the U.S. hotels had a “good, not great year.” She noted the sector operated most of the year in a “pretty favorable macroeconomic environment.” That contributed to the industry reaching “its highest-ever annual occupancy and grew RevPAR for the ninth year in a row—albeit at a rate lower than the long-term average. All classes recorded RevPAR gains, but the Upper Upscale and Upscale segments showed occupancy declines, and we expect this trend to continue throughout 2019.”
Among the Top 25 Markets, Super Bowl LII host Minneapolis/St. Paul, reported the year’s largest spike in RevPAR (+6.9% to $82.96), primarily due to the second-highest jump in ADR (+5.8% to $122.66).
Miami/Hialeah posted the largest lift in ADR (+6.1% to $199.35), which resulted in the second-largest increase in RevPAR (+6.3% to $152.81).
Philadelphia, PA-NJ, experienced the highest rise in occupancy (+3.8% to 71.1%), and the third-largest increase in RevPAR (+6.0% to $94.60).
Due to a comparison with the effect of Hurricane Harvey in 2017, Houston reported the steepest declines in each of the three key performance metrics: occupancy (-5.3% to 63.1%), ADR (-2.4% to $105.45) and RevPAR (-7.5% to $66.57).
Washington, D.C.-MD, posted the only other decrease in ADR (-2.0% to $156.42), which resulted in the second-largest drop in RevPAR (-3.2% to $111.51).
Source: Connect Commercial Real Estate