STR Weekly Insights: 6 - 12 October 2024

Analysis by Isaac Collazo, Chris Klauda, Will Anns

Countries/markets mentioned: 

• United States: Atlanta, Las Vegas, New Orleans, New York City, Phoenix, Augusta, Florida Central North, Greenville/Spartanburg, Macon/Warner Robins 
• Global: China (Guangdong, Shanghai), Italy (Milan, Rome), Spain (Canary and Balearic Islands, Madrid)

Highlights

• Hurricane displacement demand and calendar shifts push U.S. hotel performance growth
• Multiple markets impacted by Hurricanes Helene and Milton
• Group demand recovered from prior week but remained soft relative to 2023
• Taylor Swift’s Eras Tour returns to the U.S. for the next three weekends
• Spain lifted by trade fairs and strong leisure demand
• China slows post-Golden Week 

A combination of events lifted performance

Hurricane impacts, calendar shifts, and fall break in different parts of the country combined to produce a solid growth week for the U.S. hotel industry. Revenue per available room (RevPAR) for the period ending 12 October 2024 increased 3.8% year over year (YoY) with occupancy rising 1.4 percentage points (ppts) and average daily rate (ADR) increasing 1.6%. Hurricanes Helene and Milton left residents in the Carolinas, Georgia and Florida in need of housing. Recovery crews entering affected markets also contribute lodging demand. 

The Yom Kippur and Columbus Day/Indigenous Peoples’ Day calendar shifts along with fall break resulted in net positive demand. Because of the combination of events, day-of-week RevPAR results showed a mixed bag with Sunday producing a decrease (-6.2%) and Monday through Wednesday growing between +5.1% to +6.3%. Saturday was the next strongest day (+3.0%) followed by Thursday (+1.8%) and Friday (+0.7%). Markets in hurricane impacted areas, as well as those catering to conventions and leisure destinations all experienced noteworthy gains. 

For the week, the Top 25 Markets saw RevPAR increase 4.1% with ADR up 2.1% and occupancy increasing by 1.5ppts. Top 25 Market leaders included New Orleans (+35.9%), driven by a convention (Water Environment Federation’s Technical Exhibition and Conference), and Atlanta (+20.6%), hosting the NRPA convention in addition to receiving people evacuating from Florida in the wake of Hurricane Milton. Tampa and Orlando, in the path of Milton, reported declines of 9.8% and 5.3%, respectively. RevPAR in the rest of the country rose 3.6% with occupancy (+1.7 ppts) driving the gain while ADR increased 1%. Top growth markets included Augusta and Macon/Warner Robins in George, Florida Central North and Greenville/Spartanburg, SC—all were impacted by hurricane displacement demand.  

Among submarkets, Anderson/Clemson, SC saw the largest RevPAR growth (+92.6%) followed by Augusta CBD/North Augusta, Augusta Area/Aiken and Ocala, FL, where RevPAR increased by more than 82%..

RevPAR increased across the chain scales in a polarized fashion with the greatest gains in Luxury (+6.4%), Midscale (+6.5%) and Economy (+5.7%). Occupancy was the primary driver of the RevPAR gains except in Upper Upscale. This occupancy strength is reflective of the above-mentioned combination of events driving demand. This was only the fourth time this year that all chain scales reported weekly RevPAR growth. 

Group demand soft relative to 2023

Group demand in Luxury and Upper Upscale hotels recovered from the previous week’s decline, increasing 15.2% week over week. However, demand was down compared to the same week last year (-2.1%). Group demand was down in both the Top 25 Markets and the rest of the country, but there were several markets that recorded strong group demand. New Orleans, Las Vegas, Phoenix, New York City, and Atlanta all saw double-digit occupancy increases. 

Global RevPAR continues to grow because of ADR

Global RevPAR (excl. U.S.) continued to grow, up 5% YoY. The weekly gain was driven entirely by ADR, which rose 8.5%, while occupancy declined 2.2ppts. By day type, weekdays (Monday-Wednesday) saw the strongest growth as RevPAR increased 7% on ADR (+12.7%) as occupancy declined. 

Among the gainers, Spain led with a 21.9% RevPAR increase via ADR (+18.5%). Madrid saw the largest ADR increase, surging 48.9%, along with a 3.8ppts rise in occupancy, attributable to the Fruit Attraction trade fair, which drew over 100k attendees. Leisure markets like the Canary and Balearic Islands also posted strong ADR growth, up 6.2% and 13.9%, respectively. 

Italy’s RevPAR (+12.5%) also rose on ADR growth (+11.5%). Milan led with ADR climbing 34.8% due to the CPHI medical congress. Occupancy at 83.9% was down slightly (-1.4ppts). Other markets showed steady gains, with Rome's ADR up 5.8% YoY and occupancy stable at 0.6ppts. 

China’s RevPAR declined 20.7% following a fortnight of growth. At 55.8%, occupancy was at its weakest level since early this year. The measure fell across all 10 of the country’s largest markets with Shanghai down 11.5ppts and Guangdong falling 2.4ppts. The end of Golden Week and a working Saturday were likely reasons for these declines. 

Looking ahead

Results for the week ending 19 October 2024 are expected to be mixed due to Columbus/Indigenous People’s Day calendar shift and ongoing impacts from the two hurricanes. 

Forward STAR data shows that demand comparisons will be negative at the start of the week with growth thereafter. Taylor Swift’s Eras Tour is back in the U.S. with positive impact expected over the next three weekends, starting in Miami followed by New Orleans and Indianapolis. Global performance is also expected to remain positive for the rest of the month.