Tue, 25 October 2016

U.S. Hotel Industry Reports Q3 2016 Increase in ADR and RevPAR

According to data compiled by STR, the U.S. hotel industry reported mostly positive results in the three key performance metrics for the third quarter of 2016.

Compared with Q3 2015, the U.S. hotel industrys occupancy was flat at 71.1%, while ADR rose 3.4% to US$127.19, and RevPAR grew 3.3% to US$90.48.

The flat occupancy performance came as industry supply (+1.6%) and demand (+1.6%) grew at the same pace.

This was the slowest third quarter for RevPAR growth since 2009, but RevPAR did hit an all-time high in absolute value, said Bobby Bowers, STRs senior VP for operations. Year-to-date supply growth is at 1.5%, which is the highest through the first nine months of a year since 2010. And even though we are still selling a record number of rooms, this slowing performance will be the new normal as rate is now the sole driver of RevPAR growth.

Among the Top 25 Markets, Philadelphia-Pennsylvania-New Jersey, posted the largest rise in occupancy (+5.9% to 76.8%) as well as the only double-digit increases in ADR (+12.6% to US$143.26) and RevPAR (+19.2% to US$110.09).

Philadelphia saw a big boost from the DNC (Democratic National Convention) in July, and the impact from the event spilled over into August, Bowers said. Year to date, Philadelphia has one of the higher RevPAR growth figures among the Top 25 Markets.

The next highest RevPAR increases for Q3 were reported in Phoenix, Arizona (+9.4% to US$52.40); Los Angeles/Long Beach, California (+9.3% to US$156.73); and Nashville, Tennessee (+8.0% to US$104.13). Overall, 20 of the Top 25 Markets saw year-on-year RevPAR growth for the quarter.

Houston, Texas, reported the steepest declines across the three key performance metrics. Occupancy in the market fell 10.3% to 60.2%; ADR was down 5.8% to US$98.54; and RevPAR dropped 15.6% to US$59.36.

Houstons problems with oversupply and diminishing demand as a result of the oil crisis have been well-documented, Bowers said. Unfortunately, it is going to take a few years for that market to recover.

No other Top 25 Market reported a double-digit decrease in any of the three metrics.

In absolute values, New York, New York, recorded the highest levels in each of the three metrics: occupancy (89.5%), ADR (US$265.25) and RevPAR (US$237.46).

See other recent news regarding: STR, RevPAR

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