STR Weekly Insights: 30 March - 5 April 2025

Analysis by Isaac Collazo, Chris Klauda

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

Highlights

• Unexpectedly low U.S. RevPAR
• Stellar group business in U.S. Top 25 Markets
• Demand around the U.S. borders remained mixed
• Global performance soars with occupancy in the driver’s seat
• Easter/Passover week slowdown on the horizon with quick uptick anticipated

Given the easy comparable that included Easter last year, U.S. results were unexpectedly muted in the week ending 5 April 2025. Revenue per available room (RevPAR) rose 0.8% on the back of a 1.4% increase in average daily rate (ADR) as occupancy declined 0.4 percentage points (ppts). The first three days of the week reflected the benefits of the favorable comparisons with RevPAR gains ranging from +12.5% on Sunday to +3.6% on Tuesday. The rest of the week was negative with Thursday seeing the largest RevPAR decrease (-5.4%). Occupancy was the main driver of the declines while ADR percentage changes remained positive every day but Thursday and Tuesday seeing the largest growth (+3.9%). 

We expect the week ending 12 April to reflect a more difficult comparable due to the solar eclipse last year. We noted some of that comparison in last week’s Saturday data as RevPAR declined 0.6%. Excluding U.S. markets in the path of the eclipse, including Dallas, Austin, San Antonio, Indianapolis, and 12 others, Saturday’s RevPAR was up (+1.5%). Given that RevPAR on Sunday, 7 April 2024 increased 42.7% with occupancy up 11 ppts, we expect more of an impact. However, keep in mind that last year’s strong gains were also against easy Easter 2023 comparisons. Thus, the overall impact may be less severe.

Top 25 Markets deliver the strongest performance

The Top 25 Markets saw the largest weekly RevPAR gain, up 5.6% collectively, with a strong start and weak ending. Nine of the Top 25 Markets posted RevPAR growth, led by Las Vegas (+44.6) in an all-around strong week that ended with the greatest RevPAR gain on Saturday. The next three top RevPAR markets, San Francisco (+24.9%), Chicago (+22.1%) and Seattle (+21.3%), posted the strongest performance on Monday and Tuesday, benefitting from the Easter comp.  

The 25 next largest markets followed the same easy Easter comp pattern, but the growth was less and the decline steeper, resulting in falling weekly RevPAR (-1.5%) even though 12 of the markets saw RevPAR grow. The next group of 38 markets saw an even larger RevPAR decline (-3.1%) driven by falling ADR (-2.1%). The rest of the country, mostly rural markets, saw a RevPAR decrease (-4.1%) on both retreating occupancy and ADR. 

There were a few markets that did very well this week:  

• Dayton/Springfield, OH, hosting the WGI Sport of the Arts World Championships, saw RevPAR increase 36.2%.
• RevPAR in San Antonio was up 21.4% due to NCAA College Basketball Final Four.
• August, GA (+21.2%) continued to see the impact from last year’s hurricane in addition to preparations for The Masters golf tournament. 

Easy comp lifted group demand growth with tougher comps ahead

Group demand in Luxury and Upper Upscale hotels continued to show strong gains, with demand this week increasing 28.2% following the prior week’s 40.8% gain. Growth in both weeks was propelled by the easy comparisons to last year. However, the strength of the Top 25 Market performance overall has much to do with this strong Group performance. All but one of the Top 25 Markets posted increased demand year over year and of the gainers, all but two, saw demand advance by more than 20%. Three of the four Top 25 Markets mentioned above were also some of the strongest performing Group markets, which included Las Vegas, Chicago, and Seattle. Nashville, New Orleans, Miami, and Orlando also joined the list of top Group markets. Outside the Top 25 Markets, Group demand was positive but to a lesser degree. In the next 25 largest markets, 17 posted a positive Group demand change with all but one posting double-digit gains.

Chain scale bifurcation continues with occupancy leading the charge

Occupancy played the starring role in both positive and negative chain scale performance. The top three chain scales (Luxury, Upper Upscale & Upscale) all saw RevPAR gains. Luxury was up 4.0%, followed by Upper Upscale (+5.4%) and Upscale (+0.7%). Occupancy growth made up most of the gain in Luxury and Upper Upscale hotels and all of the gain in Upscale. The remaining chains scales (Upper Midscale, Midscale and Economy) saw RevPAR decrease via declining occupancy. 

Border town demand remained mixed

Hotel demand in hotels along the Canadian and Mexican borders remains mixed, and it is difficult to identify the factors driving changes because of seasonal shifts as well as obvious economic and political changes. Given this complex backdrop, demand this week across 1,306 hotels within 50 miles of the Canadian border declined 0.7%, aligning with flat national demand. Over the past 28 days, demand at border hotels increased 0.3% compared to national demand at +0.8%. Some differences observed across the largest border cities (based on demand) show the two largest cities, Detroit and Williston, posting 28-day average demand increases of 11.1% and 8.0%, respectively. The next two largest cities, Niagara Falls and Bellingham, saw demand decline 14.5% and 0.6%, respectively. On the Mexico border, of the 916 hotels within 50 miles, demand declined 6.3% in the most recent week and 2.3% over the past 28 days. Differences observed across the two largest border cities, Tucson and El Paso, reveal demand declines over the past 28 days of 1.5% and 3.4%, respectively.

Global performance soars

RevPAR across the globe showed double-digit growth (+15.4%) for third time this year. Occupancy drove RevPAR, increasing 5.8ppts, the greatest year-over-year increase since early-2024. Not to be outdone, ADR rose 5.3%, continuing a growth pattern in 60 of the past 62 weeks. The easy comparison against the Easter, Passover and Ramadan calendars last year lifted performance across much of the globe. All of the top countries based on supply, except China, advanced with the top two lifted primarily by occupancy:

• Indonesia’s RevPAR skyrocketed (+55.1%), boosted almost entirely by occupancy, up 21.5ppts due in part to the end of Ramadan last week compared to last year when Ramadan ended 8 April.
• Germany continued its strong performance from the previous week with RevPAR advancing 44.6% (+46.4% the week prior) benefiting from conferences and fairs in addition to spring travel. Occupancy (+16.7ppts) overshadowed healthy ADR (+10.1%) in driving the increase. Practically all (12 of 13) markets advanced RevPAR with occupancy being the main driver.
• Unlike the top two, the next two RevPAR growth counties, Japan and Mexico, advanced almost entirely due to ADR.
• Canada recorded strong RevPAR growth due to occupancy. Canada’s strong performance is notable because the country typically follows U.S. trends. The majority of markets (13 of 22) posted increases with Prince Edward Island, Saskatchewan and Ottawa all increasing RevPAR over 30%. Two Canadian markets in the path of last year’s total solar eclipse experienced double-digit decreases on Saturday – Toronto down 20.9% and Montreal down 21.8%.
• China experienced its sixth consecutive week of RevPAR decline (-4.4%). Most markets (32 of 48) saw RevPAR declines, however, the two largest markets, Shanghai and Beijing, posted RevPAR gains.

Looking ahead

Next week’s U.S. hotel performance data is expected to show declines at the start of the week due to the comparison to last year when the Total Solar Eclipse took place 8 April  2024. An upswing should ensue from there, producing a modest gain. Markets within the eclipse’s path of totality that swept across North America from north central Mexico to the northeast border of the U.S. and Canada will be impacted the most. Given this backdrop, occupancy on the books (OOTB) for the week among the top markets is positive (+3.5%), as seen in our Forward STAR data. OOTB is down for Sunday and Monday but quickly recovers, which is the reason for this seeming disconnect between the anticipated negative eclipse comp and the positive occupancy on the books. Additionally, Dallas is the only market included in the top markets. 

The following week will dip due to the religious observances of Passover and Easter with both concluding on Sunday, 20 April 2025. Last year these two observances did not overlap, which led to more concentrated weeks of high group demand, while this year there have been more weeks available allowing meeting planners to spread out events. 

Global performance is expected to continue strong as events, festivals and concerts rev up on the cusp of the peak leisure travel season. Last year’s events in Europe will provide some headwinds to year-over-year growth. 

In addition, waning consumer confidence and a volatile stock market may put a damper on travel, however much is unknown. Remember, with the memory of COVID lockdowns, travelers now more than ever consider travel a birthright.