Hotel Data Conference: Mapping hotel performance

NASHVILLE — The Hotel Data Conference returned to Nashville for its first in-person gathering since 2019, examing how the industry has changed over the last year and a half and looking ahead to what hoteliers can expect in the coming months.

Vail Ross, STR's SVP of sales & marketing, began the opening general session with updates on occupancy, rate and revenue, and how the top 25 markets in the country are faring. 

In the U.S., hotel occupancies have been relatively strong as leisure travelers take to the road. STR had expected the third week of July would be an occupancy peak, “just based on historically what we've seen in demand patterns as well as the growing concern of the Delta variant,” Ross said. The prediction was accurate, with U.S. weekly hotel occupancy reaching 71.4 percent—its highest level since October 2019—during the week of July 18–24. The numbers declined to 70.1 percent the following week, but Ross noted that indexed to 2019’s numbers, occupancy actually grew 1.7 percent. “In other words, the slight occupancy declines that we are seeing [are] more of a seasonality [and] not necessarily being driven at this point in time by COVID.” 

Of all hotels that report their numbers to STR, a full three quarters of them have had occupancies above 60 percent, Ross said—and the trend has held on for several weeks. When indexing to 2019, both weekday and weekend occupancies are showing overall improvement.

The downturn in corporate travel has, understandably, meant that hotels in different chain scales are facing different recoveries. Select service hotels have done “incredibly well” in terms of occupancies as they are not as reliant on group and corporate business as upscale properties. “And because we have seen a surge of leisure travel coming back, these are often properties that are located off the interstate or in more suburban markets where we're seeing a movement of commerce, or we have central workers coming into the community,” she said. “This hotel class segment has done well and has exceeded 2019 levels.” Full-service hotels, meanwhile, are “still lagging.”

Rates started to exceed 2019 levels around July 4, and has continued to be strong, with current ADR $143 for the total U.S., surpassing the comparable period in 2019. “Among all of the class segments, we have either hit or exceeded 2019 levels with rate,” Ross said. “So while we may not have the occupancy levels, we are definitely holding on to the rates that we've had.” 

STR has been tracking overall performance of revenue per available room to determine if the industry is in a recession, a depression or a recovery zone. Today, the majority of all of the markets—and the hotels within those markets—are at the recovery performance levels of RevPAR, with only San Francisco; San Jose, Calif.; and New York City still in a depression. 

Top Markets

Recovery has been a tale of two different cities, Ross said, depending on location and property. Five of the top 25 markets are either performing at or exceeding 2019 levels in terms of occupancy: Virginia Beach, Va.; Nashville; Tampa, Fla.; Atlanta; and Phoenix. Markets like Washington, D.C., San Francisco, New York and Boston, meanwhile, are struggling with the lack of corporate groups and international travel. 

Rate is “a little bit of a rosier story,” Ross said, with approximately 12 of the top 25 markets outperforming ADR. “The five that have exceeded occupancy are taking advantage of that demand or exceeding ADR levels as well,” she said. Other markets that are leveraging strong performance from a rate standpoint include San Diego; Miami; Orange County in California; Orlando, Fla.; New Orleans; Detroit; and Houston.

Of course, several of these top markets are in COVID hotspots, Ross acknowledged, so time will tell what kind of impact the new outbreaks will have on performance. Meanwhile, markets outside the top 25 are recovering well as travelers continue seeking drive-to destinations without crowds.