STR Weekly Insights: 9-15 February 2025

Analysis by Chris Klauda

All financial figures in constant U.S. dollar. 

Highlights

• Valentine’s Day love spread across the whole week
• Group weekdays and leisure weekends drove performance
• Wildfire impact slowed considerably around Los Angeles while hurricane impact remains 
• Chain scale bifurcation is alive and well
• China, with the New Year holiday shift, dampened global demand
• A compressed spring calendar bodes well for convention and conference travel

A good week for the hotel industry

The Valentine’s Day calendar shift spread love to both meeting planners and leisure travelers during the week ending 15 February 2025. Valentine’s Day landed on a Friday this year, compared to Wednesday last year. This gave meeting planners the go ahead to schedule conferences and conventions during the week, while the Valentine’s Day Friday kicked off a long Presidents’ Day weekend, making it a good week all around for the hotel industry. 

Revenue per available room (RevPAR) increased 3.4%, with average daily rate (ADR) advancing 2.2%, while occupancy was up 0.7 percentage points (ppts). Weekdays produced the greatest gains, with RevPAR up 7.4%, followed by the weekend (+6.2%). The shoulder period (Sunday & Thursday) was down 6.8% due to the Sunday Super Bowl market shift from Las Vegas to New Orleans. 

As mentioned last week, the impact of Super Bowl LIX in New Orleans had a lopsided impact on weekly performance due to last year’s host, Las Vegas, being a much larger market than New Orleans. Super Bowl Sunday produced a RevPAR increase of 216.4%, driving New Orleans’ RevPAR up 33.5% for the week. However, the impact of the Super Bowl was complicated by the fact that New Orleans celebrated Mardi Gras this week last year, resulting in RevPAR declines on Monday and Tuesday. 

Las Vegas, on the other hand, experienced a 35.5% weekly RevPAR decline and an 81.3% drop in the metric on Sunday. Excluding these two markets, U.S. hotel RevPAR for the week advanced a healthy 6.2%, the result of ADR up 4.4% and occupancy gaining 1.0ppts. 

A final note on Super Bowl LIX

From Friday to Sunday, New Orleans’ occupancy achieved 93.6% – the highest occupancy of any Super Bowl, topped only by the last time it was in New Orleans, (2013, 95.8%). ADR this year reached a record $810, resulting in RevPAR of $758, which was second only to Las Vegas. The New Orleans CBD benefited the most with RevPAR of $937 – the result of occupancy at 98% and ADR at $955. Last year’s Super Bowl in Las Vegas saw RevPAR for the market at $768, with ADR at $634 and occupancy at 82.5%.

A very good week for the Top 25 Markets

The Top 25 Markets experienced the strongest performance with 19 of the 25 markets posting performance gains. Excluding the two Super Bowl markets, Top 25 ADR increased 5.7% while occupancy rose 2.7ppts, resulting in a RevPAR increase of 10.1%. Weekdays produced the largest increase (13.0%), followed by weekends (11%) and shoulder days (3.6%). 

Chicago, Philadelphia and San Francisco all posted RevPAR gains of more than 25%. Chicago RevPAR was high throughout the week, while Philadelphia saw the largest gain on Thursday ahead of the Philadelphia Eagles Super Bowl victory parade on Friday. San Francisco hosted the NBA All-Star game, and saw the greatest RevPAR gains over the weekend. The rest of the country saw solid RevPAR gains during the weekday and weekend periods, while the shoulder days declined.  

Strong group performance lifted hotels across the country. 

Group demand across Luxury and Upper Upscale hotels increased 14.7% year over year. Demand rose 16.3% across the Top 25 Markets, with 22 of the 25 markets posting positive year-over-year gains. Across the rest of the country, group demand increased 6.2%. The importance of Valentine's Day and the impact of the calendar shift from Wednesday to Friday was highlighted by weekday group demand, which increased 31.2% YoY. Group ADR for the week increased 2.4%. Las Vegas had an outsized impact on ADR. Excluding this market, group ADR increased 5.9%. 

Hurricane impact remains, fire impact slowing

The 13 markets in the southeast impacted by Hurricane Helene and Hurricane Milton which took place last fall continued to see elevated performance, with RevPAR up 15.6% this week, similar to the growth seen over the past two weeks. Occupancy gains are holding at around +6ppts with ADR increasing about 6%.  

The impact from the massive California wildfires that began in early January appears to be receding. Greater Los Angeles (Los Angeles, Orange County, California Central Coast, Inland Empire) has seen slowing RevPAR gains, from +8.6% the week ending 1 February, +5.1% last week, to +1.6% this week, indicating a return to normal trading patterns across the greater area. 

Three areas in the Los Angeles market continued to see elevated occupancy increases: Pasadena/Glendale/Burbank (12.5ppts), Los Angeles East (8.4ppts), and Los Angeles North (4.9ppts), however these increases have also started to shrink. The declines seen in the Hollywood/Beverly Hills submarket since the fire also continue to shrink, with occupancy down 2.5ppts this week compared to -4.9ppts the previous week, and -10ppts the week before that.

Chain scale bifurcation is alive and well

Bifurcation returned to chain scale performance with RevPAR growth ranging from 11.6% among Luxury hotels, to 0.9% for Economy. Occupancy growth drove RevPAR gains in Upper Upscale and Upscale hotels, whereas ADR was the primary driver in the bottom three chains scales. Luxury hotels saw even increases in occupancy and ADR. The lingering impact of Hurricane Helene and Hurricane Milton have impacted performance almost exclusively in the lower tiers. Excluding the 13 hurricane markets, chain scale bifurcation is even more pronounced, with RevPAR ranging from Luxury at +12.3% to Economy at -2.0%

Chinese New Year calendar shift depressed global demand

Global demand, excluding the U.S., declined 3.5% driven by China and the shift of Chinese New Year (CNY) that concluded on 12 February. CNY began on 10 February last year. Excluding China, Global demand rose 2% resulting in occupancy of 65.8% – the highest level of the year. Countries seeing double-digit demand growth this week included Indonesia, the Netherlands, Belgium and Germany. 

Among the top 10 largest countries based on supply, RevPAR percentage changes ranged from +21.3% in Mexico to -49.9% in China. Five of the 10 countries saw double-digit growth this week with ADR being the primary driver. Indonesia was the one exception where strong occupancy growth offset an ADR decline. 

A relatively flat week ahead

Next week’s U.S. results should be relatively flat. The Presidents’ Day holiday will slow business and conference travel, however the holiday occurred at the same time last year so the comparison will be clean. 

Spring holidays provide the next wrinkle in predicting travel patterns, with Easter occurring later this year in addition to overlapping with Passover, which was not the case last year. This compression of the two observances should benefit conference and group travel, as only one week will be off limits to planners, unlike last year when the two observances were completely separate from each other. The rest of the world will see difficult comps next week given that Chinese New Year was a week later last year.