Global hotel occupancy rising ahead of summer in the Northern Hemisphere

Analysis by Eddie Yeung

STR's global "bubble chart" update through 20 May 2023 shows 85% of markets with growth in revenue per available room (RevPAR) compared to 2019. That percentage represents a high mark since measurements against pre-pandemic times began. More notably, however, the gains included a more significant contribution from occupancy growth, as half of all markets surpassed their 2019 comparables.

Among all countries with a room supply of more than 50,000 rooms, Israel, Singapore, Greece, Italy, and Ireland led in RevPAR on an actual basis. Among those countries, Singapore has been a mainstay on the leader board, ranking in the top five for the five consecutive 28-day periods. Ireland joined the leaders for the first time in 2023, thanks to occupancy jumping to 85%.

Occupancy rates in general are moving upward as summer approaches for most of the world, with 40 out of 48 countries in the 50,000-room group reporting occupancy rates above 60%. While Ireland led in the metric, Vietnam lagged with the lowest occupancy rate of 47.8%.

The most recent 28-day period produced the strongest performance since STR began these global bubble chart updates in 2022, as 44 of 48 countries experienced significant RevPAR growth compared to the corresponding period in 2019. Nearly all countries (46 of 48) saw their average daily rate (ADR) surpassing 2019 levels, while an additional 18 countries reported growth in occupancy. This was the highest total in occupancy and RevPAR growth since the beginning of these updates.

Among the bottom five performers in terms of RevPAR, Vietnam and Saudi Arabia faced significant declines compared to 2019, with drops of 26% and 20% respectively. It's important to note that Saudi Arabia's decline in performance can be attributed to seasonal adjustments caused by the shifting months of Ramadan.

Excluding markets with fluctuating exchange rates, the top five performers in terms of RevPAR included the Italian Islands, Italy Central, Dusseldorf, Cologne, and Rio de Janeiro. Although German markets faced challenges throughout 2022 due to the absence of trade shows and conferences, the most recent 28-day period witnessed the resurgence of events, propelling two German markets to the top five.

Market-level percentage changes were in line with country-level trends, as 85% of markets exceeded their 2019 RevPAR level and over 50% witnessed growth in occupancy.

While previous renditions of this blog indicated that RevPAR growth was primarily driven by ADR growth, the increasing number of markets experiencing occupancy growth signifies a more balanced recovery in the industry.