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Hotels in U.S. Report August 2017 Increase in ADR, OR and RevPAR

According to STR, the U.S. hotel industry reported positive results in the three key performance metrics during August 2017.

In a year-on-year comparison with August 2016, the industry reported the following an increase of 0.9% to 70.7% in Occupancy, ADR rose by 1.6% to US$127.69, and RevPAR increased 2.5% to US$90.31.

“The industry sold 3 million more room nights than any other August on record,” said Jan Freitag, STR’s senior VP of lodging insights. “At the same time, there were almost 3 million additional room nights available compared with last August, which limited the increase in occupancy. Pricing power continues to be limited with below average ADR growth, but the sum of the other performance indicators led to healthy RevPAR growth. Less than a full week of August data would have been significantly affected by Hurricane Harvey, but we anticipate fundamentals to be higher in September due to increased demand and a number of properties going offline amid the aftermath of the two hurricanes. That said, if we exclude the state of Texas from the August results, U.S. ADR growth would have been slightly better at +1.8%.”

Among the Top 25 Markets, Nashville, Tennessee, posted the only double-digit increase in RevPAR (+13.4% to US$108.76), due primarily to the month’s only double-digit rise in ADR (+10.9% to US$142.00). Occupancy in the market rose 2.2% to 76.6%.

The next highest increases in RevPAR were reported in St. Louis, Missouri-Illinois (+8.8% to US$75.90); Phoenix, Arizona (+6.3% to US$48.59); and Orlando, Florida (+5.3% to US$71.83).

RevPAR growth in Orlando was driven by the month’s largest increase in occupancy (+4.5% to 72.3%).

Philadelphia, Pennsylvania-New Jersey, reported the steepest declines across the three key performance metrics. Occupancy fell 6.4% to 71.8%, ADR was down 8.0% to US$121.74 and RevPAR dropped 13.9% to US$87.44.

No other double-digit decreases were reported among the major markets.

Houston, Texas, reported the second-largest decreases in ADR (-2.9% to US$94.94) and RevPAR (-5.2% to US$55.32).

New Orleans, Louisiana, saw the second-largest decline in occupancy (-5.9% to 53.5%).

“Occupancy declined for the second month in a row in the major markets as supply continued to grow at a very strong pace,” Freitag said. “There weren’t many performance fluctuations in the top 25, but we would expect that to change with September data, especially in Hurricane-affected markets like Houston, New Orleans and Miami.”

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