STR Weekly Insights on International Resort Trade Efficiency: 18th August

U.S. RevPAR up for sixth consecutive week – Taylor Swift’s remaining European reveals carry London

Highlights

• U.S. RevPAR up for sixth consecutive week
• All chain scales posted RevPAR positive aspects for less than third time since Might 2023
• Chicago sees DNC carry 
• Group demand wholesome and rising within the U.S. Prime 25 Markets
• Taylor Swift’s remaining European reveals carry London

U.S. income per obtainable room (RevPAR) soared within the week ending 24 August 2024, up 4.5% yr over yr, which was the best enhance of the previous eight weeks. The Prime 25 Markets once more led the trade, particularly on weekdays (Monday-Wednesday) and have been supplemented by progress elsewhere, particularly Transient weekday demand in non-Prime 25 Markets. Room demand has been trending upwards for the previous 4 weeks, nonetheless led by the upper-tier chain scales (Luxurious & Higher Upscale) however with added contributions from the center of the market (Upscale and Higher Midscale) and fewer lower within the decrease tier (Midscale & Economic system). Common every day fee (ADR) positive aspects typically met or exceeded the present degree of inflation. With convention and conference season across the nook, the subsequent couple months are anticipated to comply with related patterns.

Highest RevPAR acquire in eight weeks

The U.S. RevPAR enhance of 4.5% included contributions from each ADR (+2.7%) and occupancy (+1.1 share factors). This was the best RevPAR acquire for the reason that week ending 29 June 2024 (+6.9%). Extra importantly, RevPAR comparisons have been constructive for the previous six weeks. Each the Prime 25 Markets and the remaining markets noticed stable progress with weekdays offering the most important RevPAR carry (+6.4%), extra a results of ADR (+3.7%) than occupancy (+1.7ppts). RevPAR on shoulder days (Sunday and Thursday) elevated 5.1% with ADR up 3% whereas occupancy rose 1.2ppts. 

The weekend (Friday/Saturday) was slower however with constructive comparisons as RevPAR was up 1.5%. That was the primary weekend acquire in 5 weeks, largely attributable to ADR (+1.2%). General, ADR was at or above the speed of inflation for all day classes besides weekends.

All chain scales elevated RevPAR for less than the third time within the final year-plus

Whereas bifurcation continued, year-over-year RevPAR comparisons have been constructive for all chain scales for the primary time since April and solely the third time since Might 2023. Luxurious resorts produced the best RevPAR enhance (+8.9%) with a powerful occupancy enhance (+3.4ppts) and stable ADR progress (+3.3%). The remaining 5 chain scales improved RevPAR in descending order from Higher Upscale (+5%) to Economic system (+2.5%) with ADR rising at a fee better than or equal to occupancy.

Chicago resorts elevated by the Democratic Nationwide Conference

Chicago, which hosted the Democratic Nationwide Conference, posted RevPAR progress of 51.1%. All Chicago submarkets elevated RevPAR starting from +74.7% in the Chicago CBD to +5.5% in Lake County. Submarkets nearer to the occasion noticed the best carry, which included Chicago O’Hare Airport (+54.5%), Chicago North (+26.2%) and Chicago Southwest (+22.2%). Final month, the Republican Nationwide Conference in Milwaukee produced RevPAR positive aspects for the week of 230.4% within the CBD and 178.0% throughout the whole market. It’s vital to notice, nonetheless, that Chicago contains six instances extra lodge rooms than Milwaukee.   

Houston skilled one other document week with RevPAR rising 45.7%. Submarkets outdoors the CBD have been the main drivers attributable to quite a lot of components together with lingering displacement attributable to Hurricane Beryl, oil & fuel turnaround exercise, and finish of summer season leisure journey and occasions.  

New Orleans, with the 105^th annual American Legion Nationwide Conference, noticed sturdy efficiency with RevPAR up 29.1%. That positioned “The Massive Straightforward” within the prime 5 of all markets in RevPAR progress for a seventh time prior to now eight weeks.

Wholesome Group efficiency propelled by weekdays

Group demand in Luxurious and Upscale resorts was up for the sixth week in a row, rising 3.7% YoY together with a wholesome development in ADR (+7.6%). Weekdays have been the first demand driver for the previous 4 weeks with weekday Group demand up 6.5% for the latest interval. Demand on shoulder days was additionally sturdy, up 4.4% whereas weekends declined 2.0%. ADR elevated for each shoulder days (+10.2%) and weekdays (+8.8%) with weekends decrease at +3.4%. The Prime 25 Markets have been totally accountable for the acquire in Group demand, up 9.5% whereas ADR elevated 8.3%. The highest two markets, Chicago and New Orleans, recorded double-digit Group occupancy progress. 

Transient efficiency throughout Luxurious and Higher Upscale resorts was up for the primary time in three weeks with demand rising 2.7% and ADR up 1.6%. Weekdays have been the strongest with demand up 3% and ADR up 2.9%. Weekends produced the weakest efficiency whereas nonetheless constructive. Houston and San Diego noticed the best enhance in Transient demand throughout the Prime 25 Markets. Transient demand throughout the remainder of the nation elevated 4.5%.

Goodbye Taylor Swift, thanks for summer season.

International efficiency improved for the 12^th consecutive week, with RevPAR rising 5.3%. This uplift was largely pushed by ADR, which rose 4.4% whereas occupancy confirmed a modest acquire (0.6ppts). And whilst occupancy grew barely to a degree of 72.6%, it was the tenth highest of the previous three years. Recall, three weeks in the past, world occupancy, excluding the U.S., reached its highest degree since 2019 (74.3%).

Mexico noticed a vital RevPAR acquire of seven.2%, with the second-highest ADR enhance of the highest nations at +13%, persevering with a double-digit progress development since late July. Nevertheless, occupancy has been softening, dipping to 59.4% for the latest week, down 3.2ppts. Inside Mexico, all markets posted ADR positive aspects, notably the Mexican Caribbean at +26.4% and the Pacific South market at +16.1%. Occupancy progress was seen in three of 12 markets, with will increase starting from +0.4ppts within the Pacific Central market to +1.4ppts in Mexico Central/Bajo. 

RevPAR continued to fall in China, down 4.0% as ADR decreased 6.3%. Nevertheless, occupancy (+1.9 ppts) rose for the primary time in 9 weeks. RevPAR has fallen for 9 consecutive weeks and in 26 of the previous 34 weeks.

In London, the final two nights (Monday and Tuesday) of Taylor Swift’s European tour produced a big efficiency increase with occupancy up 9.8ppts and ADR rising 15.1%. Throughout all 5 tour nights, occupancy grew 8.1ppts and ADR superior 18.4%. For the whole week, London RevPAR grew 11.9% on a 5.8% rise in ADR and 4.6ppts occupancy enhance. Occupancy reached 84.0% for the week, down from the prior week (86.8%) however above 80% in 16 of the previous 19 weeks. 

This yr has been a Taylor Swift summer season in Europe with live shows throughout 13 nations. An affect evaluation of the Eras Tour in Europe shall be obtainable on STR’s web site within the coming weeks.

Wanting forward

U.S. resorts had a stable week, and August has been stronger than July, however we count on the remaining week of the month to be flat to down, primarily based on 2019 efficiency, the place the yr appeared loads like this yr. 

Nevertheless, early projections present that the month will put up stable RevPAR progress due in half to the inclusion of a fifth weekend versus a yr in the past. Extra importantly, the current strengthening in weekdays with the beginning of colleges in lots of components of the nation serves as a constructive indication that enterprise journey is recovering and can assist stabilize efficiency within the coming weeks and months. 

International efficiency will stay wholesome whereas slowing as summer season involves an finish within the northern hemisphere. All indications are that China will proceed to see mushy efficiency.

This text initially appeared on STR.