HENDERSONVILLE, Tenn. — Global performance was the bright spot this week with sports and concerts in full swing. Highlights of the week’s report included the Juneteenth holiday calendar shift, which impacted U.S. performance across the board; RevPAR declines reported across all chain scales; and EURO 2024, Formula One and Taylor Swift’s Eras Tour lifted cities across Europe.
Shift in Juneteenth holiday pushed occupancy down while rate held.
U.S. revenue per available room (RevPAR) decreased 2.4 per cent year-over-year (YoY), which was entirely the result of an occupancy decline of 1.8 percentage points (ppts). Average Daily Rate (ADR) was basically flat at +0.1 per cent YoY.
For most of 2024, weekdays (Monday to Wednesday) have been elevating overall weekly performance. The Juneteenth federal holiday, occurring on Wednesday this year compared to Monday last year, essentially halted mid-week business and group travel. RevPAR declined 5.8 per cent on Tuesday and 5.9 per cent on Wednesday, the result of occupancy down 3.3ppts and ADR down 1.4 per cent for both days. Monday RevPAR increased 3.6 per cent due the easy comparison to last year when Juneteenth fell on Monday. Thursday showed a slight RevPAR decline (-0.4 per cent). Weekends (Friday to Saturday), which have produced negative RevPAR comparisons for 14 of the past 24 weeks, continued the streak with a 1.3-per-cent RevPAR decline YoY.
Decreases more pronounced in the top-25 markets
While weekdays have been elevating industry performance in recent months, weekdays in the top-25 markets have provided the primary lift. Because of this, the Juneteenth shift had an even more dramatic impact on this segment. RevPAR declined 2.9 per cent in the top-25 markets with Tuesday and Wednesday down 8.3 per cent and 9.2 per cent, respectively, with a generally equal decline in occupancy and ADR. The rest of the country also saw a RevPAR decline (down two per cent), however, Tuesday and Wednesday’s declines were less than half the amount seen for the top 25 with the decline due entirely to occupancy.
Only eight of the top-25 markets produced positive RevPAR comparisons with Seattle and Philadelphia reporting double-digit increases. These two markets also saw the greatest RevPAR gains on Tuesday and Wednesday, which were also in double figures.
No chain scale was immune to the impact m
From luxury to economy, all chain scales saw a RevPAR decrease due primarily to occupancy declines. Luxury hotels were the exception with RevPAR down 3.6 per cent on a 3.9-per-cent drop in ADR. Upper upscale saw the smallest RevPAR decline (down 2.1 per cent) followed by midscale (down 2.5 per cent), upscale (down 2.8 per cent) and upper midscale (down three per cent). Tuesday and Wednesday showed the greatest RevPAR decline across the top three chains scales. The bottom three chain scales didn’t experience as great a decrease on Tuesday and Wednesday with their largest declines on Sunday then Friday/Saturday.
Group demand also impacted by the holiday shift
Luxury and upscale hotel group demand decreased 7.2 per cent compared to the same week last year, representing only the second group demand decrease over the past eight weeks. Again, impacted by the holiday shift, the greatest YoY declines were on Tuesday (down 12.6 per cent), Wednesday (down 16.3 per cent) and Thursday (down 10.1 per cent). Only Sunday and Monday saw increases with Monday benefitting from an easy comp from last year. Positive YoY Group ADR continued for the eighth week in a row, increasing 3.3 per cent YoY. Four top-25 markets saw group occupancy increases greater than five ppts, including Philadelphia, Anaheim (Orange County), Nashville, and Oahu.
Global performance was the bright spot this week with sports and concerts in full swing
Steady RevPAR growth continues across the globe fueled by ADR increases while occupancy slows. In particular, Europe experienced strong performance. After the first full week of the Euros, Germany saw a YoY RevPAR increase of 30 per cent, primarily because of ADR, which increased 27.3 per cent. All host cities saw positive ADR comparisons with the highest gain in Stuttgart at +88.7 per cent YoY. The matches also resulted in large YoY occupancy increases for Stuttgart (up14.0ppts to 85 per cent) and Dusseldorf (up 14.6ppts to 82.8 per cent).
In the U.K., a YoY RevPAR gain of 7.5 per cent was entirely supported by ADR growth (up 7.3 per cent). Taylor Swift’s Eras tour took her through the Cardiff and London. RevPAR in London was up 7.5 per cent YoY, while Cardiff saw a YoY decline of 5.8 per cent with more performances last year in the same week by Harry Styles.
France saw a YoY occupancy decline of 4.2ppts to 78.3 per cent, down 11.5 per cent in ADR and 16 per cent in RevPAR. A lot of business and leisure travelers look to be avoiding the region ahead of the Olympics. Fortunately, occupancy on the books is nearing 80 per cent for the Games.
Looking ahead
The next week of data should show recovery of some business demand, which was delayed with the Juneteenth holiday. We expect a return of the strong performance in the top-25 markets on weekdays and improved group demand. The week of July 4th is expected to produce a drop in ADR with a more dramatic decrease in occupancy. Note, AAA is expecting record road trips, and the TSA also expects record travel during that time while the recently reported decline in Consumer Confidence in May could temper these expectations. The two weeks post July 4 should show a week-over-week increase in occupancy with the metric reaching its apex in the week ending July 20.
Globally, summer should produce strong performance in cities across the northern hemisphere benefitting from concerts and sporting events. Additionally, most key European cities will also benefit from increased travel by Americans. In May, outbound travel from the U.S. was up 11 per cent overall.
The post STR Global Hotel Industry Performance for Week of June 16 to 22 appeared first on Hotelier Magazine.