From HNN Newswire:
HENDERSONVILLE, Tennessee—The U.S. hotel industry reported positive results in the three key performance metrics during March 2017, according to data from STR.
According to STR analysts, performance growth was boosted by a favorable Easter calendar shift, particularly in the Group segment. The opposite will occur with April data.
In a year-over-year comparison with March 2016, the industry reported the following:
Occupancy: +2.6% to 68.0%
Average daily rate (ADR): +2.4% to US$127.79
Revenue per available room (RevPAR): +5.1% to US$86.93
March 2017 marked the industry’s 85th consecutive month with a year-over-year increase in RevPAR.
“The absolute occupancy, ADR and RevPAR levels were the highest for any March on record, but results were skewed by the comparison with an Easter month last year,” said Jan Freitag, STR’s senior VP of lodging insights. “In fact, because of the strong performance, annualized occupancy was pushed to an all-time high of 65.6%. But these records won’t last. Supply growth was 1.9% for the third straight month—we have not seen a period of sustained supply growth like that since early in 2010—and we don’t expect demand to keep up at the same level once we move past this Easter calendar shift. When the dust settles, and the year progresses, we should see small occupancy declines, but ADR increases still pushing modest RevPAR growth.”
Three Top 25 Markets posted double-digit RevPAR growth in March, led by Detroit, Michigan (+21.6% to US$69.53). That increase was driven by the month’s only double-digit lift in occupancy (+14.1% to 69.9%). ADR in the market was up 6.6% to US$99.47.
San Diego, California, reported the largest increase in ADR (+9.3% to US$162.85), pushing the second-largest increase in RevPAR (+12.9% to US$135.43).
St. Louis, Missouri-Illinois, was the only other Top 25 Market with double-digit growth in RevPAR (+12.2% to US$71.75).
San Francisco/San Mateo, California, experienced the steepest decline in RevPAR (-5.9% to US$177.82). Miami/Hialeah, Florida, reported the largest drop in ADR (-6.9%) despite having the highest absolute value in the metric (US$233.36). Oahu Island, Hawaii, saw the largest dip in occupancy (-2.9% to 79.5%).
The major markets (RevPAR: +2.3%) finished well behind all other markets (RevPAR: 7.1%) in performance growth,” Freitag said. “That will likely be the trend with supply growth around 100 basis points higher in the Top 25 Markets. Not only is occupancy slipping in those markets, pricing power also looks to be diminishing.”
Download the March 2017 U.S. hotel review here.