U.S. Hotel Industry records Year-on-Year Declines in Occupancy and RevPAR during September 2008

The U.S. hotel industry posted year-over-year declines in occupancy and revenue per available room during September 2008, but experienced a gain in average daily rate, according to data from STR.

In year-over-year measurements, the industry's ADR rose 3% in September to US$107.31 (from US$104.14 during September 2007). Occupancy in September fell 5.9% from September 2007 to 60.6% from 64.5%. RevPAR for the month declined 3.1% to US$65.08 from US$67.13.

For the third quarter, overall U.S. hotel numbers (compared with third quarter of 2007) included a 3.7% drop in occupancy to 65.8% from 68.4%, a 2.7% rise in ADR to US$106.93 from US$104.08, and a 1.1% decline in RevPAR to US$70.40 from US$71.19. The top 25 markets with the largest third-quarter RevPAR gains over the third quarter of 2007 were New Orleans (+20.2%), Denver (+12.3%), Houston (+11.8%), New York (+8.4%), San Francisco (+7.8%) and Dallas (+6.4%).

"The U.S. lodging industry faced a challenging third quarter. RevPAR growth moved into negative territory for the first time since second quarter 1993-ending a span of 5 years with positive quarterly RevPAR increases," said Bobby Bowers, STR's senior vice president of operations. "We expect a continued difficult operating environment in the final quarter of 2008. Room supply growth will continue while demand growth (room nights sold) likely will remain soft in many markets, driven by slowing economic growth."

For the year-to-date through September, occupancy stood at 62.9%-a 3% decrease from year-to-date September 2007. September year-to-date ADR was up 3.7% to US$107.41 (from US$103.59), and RevPAR rose 0.6% to US$67.58 from US$67.21 through the first nine months of 2007. September YTD industry room supply increased 2.5% while demand (room nights sold) declined 0.6%, resulting in the 3% occupancy decline. Room revenue increased 3.1% in the first nine months of 2008 to US$84 billion.

During September 2008, the luxury segment experienced a 7.1% decline in occupancy and a 6% drop in RevPAR from the previous September. The segment's year-over-year ADR increased 1.1% to US$287.21. Year to date through September, the luxury segment saw a 2.9% drop in occupancy and a 0.8% dip in RevPAR from the same period in 2007. ADR for the same period was up 2.1%

In other year-to-date highlights: urban properties posted a 4.2% increase in RevPAR and a 5.5% rise in ADR; New Orleans experienced a 16.3% jump in RevPAR, while San Francisco saw a 9.7% increase in the same category; and Phoenix experienced the biggest drop in occupancy among Top 25 markets with a year-over-year decline of 9.6%.

See other recent news regarding: Travel News Asia, Promotions, New Hotels, Visitor Arrivals, STR, Survey, Research, MasterIndex, September 2008