STR Weekly Insights: 4-10 February 2024

Exterior of the U.S., YoY efficiency for the highest 10 nations was largely swayed this week by a Chinese language New Yr calendar shift. The annual vacation occurred two weeks earlier final yr. Solely two different nations, Canada and Germany, noticed declines – albeit small ones at -1.3ppts and 1.4ppts, respectively.

Highlights

• Tremendous Bowl carried U.S. lodge efficiency over the purpose line.
• U.S. Group demand elevated for a fifth consecutive week.
• Las Vegas posted its highest Friday/Saturday ADR on document and the very best for the Tremendous Bowl.
• Chinese language New Yr calendar shift softened efficiency in China.
• Sturdy efficiency in Japan aided by Taylor Swift.

U.S. Efficiency

Tremendous Bowl LVIII, hosted in Las Vegas, was chargeable for the U.S. lodge business’s robust year-over-year (YoY) development in income per obtainable room (RevPAR), which was up 3.9% and pushed totally by a 6.8% improve in common day by day fee (ADR). U.S. occupancy fell 1.5 ppts as enterprise slowed forward of the large recreation. With out Las Vegas’ ADR contribution, U.S. ADR would have been flat in comparison with final yr and RevPAR down 3%. It is very important observe that this week’s information solely runs by way of Saturday, and Las Vegas will proceed to affect outcomes into the next week on condition that recreation day was on Sunday.

Las Vegas additionally moved efficiency for the Prime 25 Markets in mixture, with RevPAR rising 11.1% YoY with ADR up 12.0% and occupancy down 0.5ppts. Excluding Las Vegas, Prime 25 Market RevPAR decreased 3.0% YoY as ADR dropped 1.9% and occupancy declined 1.0ppts. Not shocking, weekends confirmed the best RevPAR shift with the Prime 25 Markets rising 20.3%. When eradicating Las Vegas, RevPAR decreased 9.7%. Las Vegas lifted Prime 25 Market weekdays (Monday-Wednesday) and shoulder days (Sunday and Thursday) to a lesser diploma with RevPAR up 5.7% on weekdays and eight.9% through the shoulder interval. Excluding Las Vegas, RevPAR held at +0.6% on the weekdays, whereas the shoulder days declined 2.8%.

Las Vegas reset the bar for Friday-Saturday Tremendous Bowl ADR (at $747), which was the very best in historical past. Till this previous weekend, Miami held the document for highest Tremendous Bowl ADR (Friday-Saturday, at $563 in 2020). Las Vegas additionally set a document for its highest weekend ADR ever because it grew 227.1%, leading to RevPAR development of 239.6%. Occupancy reached 83.7% over the weekend. Total, Las Vegas RevPAR for the whole week was up +139.9% YoY, pushed nearly totally by ADR (up 126.1%).

Whereas Las Vegas was the story this week, a number of different Prime 25 Markets additionally noticed stable RevPAR features together with New Orleans (+21.4%), with Mardi Gras lifting weekend RevPAR 60.8%, Boston (+12.5%), helped by robust Sunday and Monday efficiency, Oahu (+12.4%) and New York Metropolis (+11.5%). Oahu and NYC posted robust efficiency all week.

The remainder of the nation noticed RevPAR decline 2.6% on falling occupancy (-2.1ppts) and modest ADR development (+1.3%). RevPAR exterior of the Prime 25 Markets has fallen in each week of the yr to date and in 29 of the previous 31 weeks.

Exterior of the Prime 25 Markets, Cellular, AL, and the New Jersey Shore noticed RevPAR improve by greater than 20% YoY.

Group enterprise features

Group demand in Luxurious and Higher Upscale inns grew for the fifth consecutive week, rising 6.5% in comparison with the identical week final yr and up 7.8% over the previous 4 weeks. Group ADR has additionally elevated, up 5.9% YoY and 4.7% over the previous 4 weeks.

Sixteen of the Prime 25 Markets noticed year-over-year group occupancy features. Las Vegas and Orlando posted the very best group occupancy and best year-over-year occupancy improve. St. Louis and San Diego additionally noticed a number of the highest group occupancy features.

International lodge efficiency

Exterior of the U.S., YoY efficiency for the highest 10 nations was largely swayed this week by a Chinese language New Yr calendar shift. The annual vacation occurred two weeks earlier final yr. Solely two different nations, Canada and Germany, noticed declines – albeit small ones at -1.3ppts and 1.4ppts, respectively.

Inside China, occupancy fell 22.5ppts YoY to 44.4%, nonetheless, this comparability doesn’t actually mirror efficiency because of the vacation beginning on a unique day every year. Evaluating to 2017 (the final yr pre-COVID when the start of Chinese language New Yr fell on Saturday), occupancy this yr fell much less week over week (-16.8ppts in comparison with -24.0ppts). Based mostly on historic tendencies, occupancy will increase may be anticipated subsequent week because the nationwide vacation continues till 17 February.

Spain noticed the most important YoY occupancy achieve out of prime 10 at +5.5ppts, as much as 61.6%, boosted by Madrid (+12ppts to 72.0%) and the Mediterranean coast market (+9ppts to 60.9%).

Spectacular YoY development was seen in Japan with ADR up 53.4%. This was a results of robust countrywide efficiency, particularly the area of Hokkaido and metropolis of Kyoto, each up 55% YoY and the mega occasion in Tokyo—4 nights of Taylor Swift’s Eras tour carried out on the 55,000-seat venue. ADR within the metropolis was up 51.8% to US$245. Japan continues to steer the highest 10 in RevPAR development, this week up 56.3% YoY.

Wanting forward

One other night time of Tremendous Bowl information will positively affect the following batch of leads to the U.S.. Excluding Las Vegas, we count on lodge efficiency to extend as we transfer nearer to peak spring convention season in mid-March. The strongest efficiency continues to be midweek (Monday – Wednesday) journey within the Prime 25 Markets, which factors to a optimistic outlook for enterprise journey. Leisure journey, mirrored by weekends, seems to have stalled driving the weak general occupancy efficiency. The upcoming spring break season ought to present some readability across the path leisure journey goes. Moreover, demand in lower-tier inns (Higher Midscale, Midscale and Financial system) has fallen in most weeks throughout all three of these lessons with the most important decreases in Financial system (-5.6%) and isn’t anticipated to point out enchancment quickly.

Over the following two months, world efficiency might be pushed by holidays, specifically Chinese language New Yr, sporting occasions, live shows (Taylor Swift’s worldwide tour in Australia and Singapore), conferences/conventions, and the change of seasons.

This text initially appeared on STR.