STR Weekly Insights: 23-29 March 2025

Analysis by Isaac Collazo, Chris Klauda

All financial figures in U.S. dollar constant currency. 

Highlights

• Easy comps boost performance across the globe 
• Meetings and sporting events propel U.S. demand 
• Expect another strong week due to Easter shift

Given the comparison to Easter week last year, U.S. hotels saw revenue per available room (RevPAR) soar 7.0% year over year. Growth was driven more by occupancy, which increased 2.8 percentage points (ppts), while average daily rate (ADR) rose 2.5%. Not surprising, weekend RevPAR was up the most (+18.5%) with occupancy rising 8.9 ppts and ADR up 4.0%. RevPAR during the weekdays (Monday-Wednesday) advanced 2.9%, primarily due to ADR (+2.4%), while shoulder days (Sunday and Thursday) increased a modest 0.9% driven equally by ADR and occupancy. 

While ADR growth was better than the previous week, it continued to lag inflation. March MTD ADR is up 1.4%, which is 1.2ppts less than our inflation expectation. A lag is also evident QTD but to a slightly lesser extent. 

Sports and other events lifted performance across host markets

The two strongest Top 25 Markets were two of the smallest: St. Louis & Minneapolis. St. Louis earned the top honor hosting the World of Asphalt Show & Conference. Occupancy rose 16.3 ppts, and ADR increased 15.8%, resulting in a RevPAR gain of 47.0%. St. Louis also benefitted from Cardinals Opening Day. Minneapolis took second place with RevPAR increasing 28.8%, driven by strong Group and Transient demand. The market’s weekly occupancy increased 10.4ppts with ADR up 5.8%. Fourteen of the Top 25 Markets saw RevPAR growth of more than 7%.

Across the 25 next largest markets, Louisville was on top, driven by the KHSAA Boys’ Sweet 16 State Basketball Tournament, which was held a week earlier last year. RevPAR rose 64.8%, which more than made up for the 36.1% decline seen last week. Amateur basketball also drove Richmond, where RevPAR increased 38.2% via the Big Shots Virginia Showtime tournament. NHL hockey benefited Columbus with RevPAR advancing 31.3%. 

Markets hosting NCAA basketball tournament games varied depending on their size. The smaller markets generally saw the largest impact. On the men’s side, weekend RevPAR growth ranged from +64.4% in Indianapolis to 11.9% in Newark. Atlanta and San Francisco, the other two cities hosting the regional finals, were up 34.5% and 22.7%, respectively. Hosting women’s games, Birmingham and Spokane saw weekend RevPAR rise 47.3% and 28.9%, respectively.

Overall, 57% of all U.S. markets saw weekly RevPAR growth above the national average. 

Luxury hotels took a backseat

Upper Upscale hotels saw the largest RevPAR gain (+10.1%) with the next three chain scales (Upscale, Upper Midscale and Midscale) close behind between +9.1% and +8.0%. Luxury hotels saw RevPAR increase 4.9%, which was nearly the same as seen Economy hotels. Occupancy played a more significant role in driving RevPAR across all chain scales with the middle four chains scales recording occupancy gains averaging 3.7ppts. Luxury and Economy RevPAR was also lifted more by occupancy but to a lesser degree. The middle four chain scales also saw stronger ADR growth (+3.0% to +4.0%) as Luxury ADR increased 2.1% and Economy 1.6%.

Group demand gained the most from the easy comp

Propelled by the easy comparison to last year, Group demand in Luxury and Upper Upscale hotels skyrocketed 40.8% with ADR up 11.8%. Markets across the country saw increased demand with 23 of the Top 25 Markets seeing gains. St. Louis, Nashville, Philadelphia, Orlando, and Minneapolis all posted more than 10ppt gains in occupancy. Markets outside the Top 25 also experienced strong Group demand growth. Nationally, Transient demand declined 4.8% with ADR up a modest 1.0% as both the Top 25 Markets and all others saw Transient decreases.  

Border town demand remained mixed

Demand across 1,306 hotels within 50 miles of the Canadian border increased for the second consecutive week, up 5.4%. On the Mexican border, (916 hotels), demand decreased 4.0% following an increase the week prior. Keep in mind that national room demand was up 5.1%. Occupancy in hotels near U.S. Mexico crossings were still running health occupancy (66.5%) versus those near Canadian borders (51.8%). Over the past 28 days, U.S. demand increased 0.7% whereas demand on the Canadian border is basically flat (+0.2%) and down (-1.7%) on the Mexican border.

Hurricane markets and Los Angeles submarkets elevated

For the first time, 2024 hurricane markets did not stand out in U.S. performance. The Easter shift makes it difficult to decide whether performance is due to continued hurricane recovery or spring break. One market that has consistently posted stronger performance is Augusta, which continues to experience the greatest impact of all 13 hurricane markets with RevPAR up 36.7% in the most recent week. The Masters tournament takes place April 10-13, so much of the market’s lift will be due to activity in advance of the tournament.

Two of the three submarkets most impacted by January’s wildfires in Los Angeles continued to see elevated RevPAR: Los Angeles East (+28.4%) and Pasadena/Glendale/Burbank (+21.6%). Los Angeles North, which had seen elevated albeit more modest increases, came down with RevPAR up just 1.7%. 

Global performance also benefited from the easy comp

Globally, occupancy increased 1.7 ppts to 67.5%, which was the first significant increase in six weeks, but mostly due to the easy comp. ADR rose 2.5%, continuing a growth streak (up 59 of the past 61 weeks) and resulting in a RevPAR gain of 5.2%. 

Among the top countries, based on supply, Germany had the largest RevPAR increase, up 46.4% due to conferences and fairs taking place unlike last year when these events shifted away from Easter week. Occupancy (+14.9ppts) drove the RevPAR increase with ADR growing 15.7%. Among other large countries: 

• RevPAR in India advanced 23.4% and was also driven by occupancy (+8.9ppts) as ADR increased 7.7%.
• Mexico’s RevPAR (+17.6%) continued to driven by ADR (+8.9%) but to a lesser extent than in previous weeks. For most of the year, ADR in the country has been rising by more than 20%.
• Japan’s RevPAR continued to expand (+4.8%) on ADR with occupancy declining. Occupancy has declined for the past four weeks with the most recent week’s decrease (-2.8ppts) the largest of the four. 
• China experienced a seventh consecutive week of falling RevPAR (-2.8%) albeit the lowest decline of the past four weeks. 
• Indonesia posted the largest RevPAR decline of the large markets, impacted, in part, by the end of Ramadan and the celebration of Eid al-Fitr.

Looking ahead

In the week ending 5 April, we expect U.S. and global RevPAR to advance again due to a second week of easy comparisons due to the Easter shift. For the U.S., the week ending 12 April is questionable due to difficult comps from last year’s solar eclipse (8 April 2024). Our Forward STAR data shows occupancy on the books up 1.5ppts for top markets. However, last year’s event was also spread out across many smaller markets, which will not see the same level of occupancy this year as the top markets. Thus, our back of the envelope forecast has demand flat for that week. Easter (20 April) in the follow week will lead to demand and RevPAR falling across the globe. Easter will also impact the week ending 26 April.