Dive Brief:
- U.S. hotel performance saw positive year-over-year comparisons in September, with RevPAR up 11%, the highest increase for any month since February 2023, according to recent CoStar data.
- Also during the month, occupancy and ADR increased by 5.4% and 5.3% YOY, respectively, per CoStar data. Among the top 25 U.S. markets, New Orleans reported the highest year-over-year improvements in occupancy (up by 10.1%) and RevPAR (up 25.5%), while Miami posted the largest room rate lift, up by 14.1%.
- Hotel performance gains in September were driven by healthy leisure demand and favorable calendar holiday shifts during the month, according to Jan Freitag, national director of hospitality analytics at CoStar Group. “The U.S. hotel industry is doing very well — this is based on the multiple demand sources that are driving up not just occupancy but also room rate,” Freitag told Hotel Dive
Dive Insight:
Despite overall RevPAR increasing in September, Las Vegas and Phoenix were the only major markets to see a decline in this metric, down by 3.5% and 0.4% YOY respectively, per CoStar. For the third quarter overall, Vegas operators, including Caesars Entertainment and MGM Resorts International, saw net revenues decline in Sin City.
Meanwhile, corporate group demand saw a “pretty sharp uptick” across the board in the month compared to last September, Freitag said.
“Last year, group room demand decelerated because corporate America took a pause after the tariff announcements,” he said. “That has now completely vanished, and we see corporate group demand come back.”
Despite overall U.S. consumer sentiment trending down and an uncertain economic landscape, leisure demand was up during September, especially among higher-income travelers, Freitag said.
“Consumer sentiment data is very, very poor,” he said. “But somehow that spurs Americans to say: ‘I have to get away, I feel so bad and I need to recharge.’”
Additionally, September was a “really good month from a calendar perspective,” Freitag said. Major holidays, including Labor Day and Yom Kippur, fell on the weekend, which provided a boost to hotels and did not get in the way of regular midweek travel.
Moreover, with 5.3% year-over-year ADR growth — which is above the rate of inflation — hotels were able to see margin expansion, he said.
While CoStar has not officially released results for the month of October, preliminary data shows that U.S. RevPAR increased 9.1% year over year, driven by ADR growth of 5.3%, Freitag said. This year, hotels were able to benefit from Halloween falling on a weekend.
Freitag added that November, as well as the remainder of the year, is on track for “continued healthy growth.”
