US Hotel Industry Posts Record Year In 2017
In 2017, the U.S. hotel industry saw occupancy increase 0.9% to $65.9%, and a 2.1% ADR increase to $126.72 drove RevPAR up 3% to $83.57 over 2016.
The U.S. hotel industry registered record-breaking performance levels during 2017, according to data from STR.
Compared with 2016:
- Occupancy: +0.9% to 65.9%
- Average daily rate (ADR): +2.1% to US$126.72
- Revenue per available room (RevPAR): +3.0% to US$83.57
The absolute values in those three key performance metrics were each the highest STR has ever benchmarked. The U.S. hotel industry also set records for supply (roughly 1.87 billion roomnights available) and demand (roughly 1.23 billion roomnights sold). Based on percentage growth for the year, demand (+2.7%) significantly outpaced supply (+1.8%), even though the supply growth figure was the largest for the industry since 2009.
The industry outperformed projections and reached record-breaking levels across the metrics in 2017, said Amanda Hite, STRs president and CEO. Late-year demand growth, which was no doubt boosted by post-hurricane business in Houston and several major Florida markets, pushed well past a healthy influx of new rooms entering the marketplace. That allowed the industry to end the year well above forecasted levels after seeing more modest rates of growth through the first half of 2017.
Given the tax cut and the stronger GDP growth that is expected, U.S. hotels are in solid position moving through the next year, Hite said. Construction activity is on the decline for the first time since 2011, so even as demand growth subsides, the effects on occupancy and rates should be more manageable for hoteliers.
Among the Top 25 Markets, Houston, Texas, reported the years largest spike in RevPAR (+10.5% to US$71.97), due primarily to the largest increase in occupancy (+7.1% to 66.7%). The markets performance was lifted late in the year as the effects of Hurricane Harvey filled hotels with displaced residents, relief workers, insurance adjustors and other hurricane-related demand.
Nashville, Tennessee, posted the largest rise in ADR (+6.2% to US$142.82) despite a supply-growth-related decline in occupancy (-0.8% to 74.1%).
Orlando, Florida, reported the only other double-digit jump in RevPAR (+10.0% to US$96.40), due to the second-highest increases in occupancy (+4.9% to 79.3%) and ADR (4.8% to US$121.53).
Overall, 18 of the Top 25 Markets recorded year-over-year RevPAR growth in 2017.
With healthy supply growth ahead of its Super Bowl host year, Minneapolis/St. Paul, Minnesota-Wisconsin, reported the steepest declines in ADR (-2.1% to US$115.89) and RevPAR (-3.6% to US$77.59).
Also affected by supply growth, Dallas, Texas, experienced the largest drop in occupancy (-2.5% to 69.6%).
In absolute values, New York, New York, recorded the highest levels in occupancy (86.7%), ADR (US$255.54) and RevPAR (US$221.60).
During the fourth quarter of 2017, U.S. hotel occupancy rose 1.8% to 61.7%, ADR was up 2.4% to US$125.34 and RevPAR increased 4.2% to US$77.34.
Among the Top 25 Markets, Houston experienced the largest increases in all three key performance metrics: occupancy (+26.8% to 72.5%), ADR (+11.1% to US$110.06) and RevPAR (+40.9% to US$79.82).
Miami/Hialeah, Florida, posted the quarters second-largest rise in each of the three metrics: occupancy (+9.0% to 77.0%), ADR (+6.6% to US$197.82) and RevPAR (+16.3% to US$152.42).
Minneapolis/St. Paul reported the largest decline in RevPAR (-4.3% to US$69.93), due primarily to the largest drop in ADR (-4.0% to US$114.01).
San Francisco/San Mateo, California, experienced the largest decrease in occupancy (-2.9% to 77.8%).
STR provides clients from multiple market sectors with premium, global data benchmarking, analytics and marketplace insights. Founded in 1985, STR maintains a presence in 10 countries around the world with a corporate North American headquarters in Hendersonville, Tennessee, and an international headquarters in London, England. For more information, please visit str.com.
Categories: Hotel Industry News