Hotel supply and demand grew in lockstep during the final quarter of 2019, according to recently released report from CBRE Hotels’ Americas Research, which also used STR data. Supply grew 2.1 percent, while demand increased 2 percent.
Year over year, occupancy fell 0.1 percent to 61.8 percent for U.S. hotels during the fourth quarter, according to the data. Meanwhile, average daily rate and revenue per available room both grew 0.7 percent during the same time period. Researchers noted that RevPAR’s growth was at a slower pace than the 2.4 percent seen a year ago but higher than the 0.1-percent figure from the previous quarter.
Market Deep Dive
When drilling down, secondary and tertiary markets led the pack for demand growth for the fourth straight quarter, according to CBRE. Demand growth outpaced supply growth and occupancy increased in all but one of the top 10 secondary markets (Nashville).
Denver, which analysts noted was boosted by new hotel developments and a rebound from 2018 wildfires, saw the highest year-over-year demand gain at 9.4 percent. Austin followed with an 8-percent increase, while Houston grew demand 7.2 percent. Rounding out the top 10 were: Fort Lauderdale, Fla.; Nashville; Salt Lake City; Cincinnati, Ohio; Tampa, Fla.; Columbus, Ohio; and Albany, N.Y.
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When looking at the top 10 markets in terms of ADR growth, Albuquerque, N.M., was the leader with a 4.6-percent gain. Additionally, the market’s RevPAR increased 8.7 percent, the highest of any market, according to CBRE.
Within the ADR growth leaders, all of the top 10 markets saw RevPAR growth outpace ADR gains, except for Savannah, Ga. Researchers noted that the market had a negative occupancy change which led to a larger increase of ADR than RevPAR.
Rounding out the top 10 ADR growth markets were: Oahu, Hawaii; San Francisco; Anaheim, Calif.; Washington, D.C.; Orlando; Columbus; Long Island, N.Y.; St. Louis; and Savannah.
In terms of the top growth markets for RevPAR, San Francisco followed Albuquerque with a 7.4-percent gain. Oahu was close behind, growing the metric by 7.1 percent. Then rest of the markets in this set included: Columbus; Baltimore; St, Louis; Anaheim; Tucson, Ariz.; Denver; and Orlando. None of the top 10 markets in here saw an occupancy increase of less than 1.9 percent.
As for the bottom 10 markets in terms of RevPAR growth, Boston took the No. 1 spot, with an 11.6-percent decrease in the metric. Analysts pointed out, however, that this decline was in part due to a strong comparison in the fourth quarter of 2018 when fires displaced much of Boston’s suburbs. Behind Boston were: San Diego; New Orleans; Milwaukee; Charlotte, N.C.; San Jose-Santa Cruz, Calif.; Indianapolis; New York; Sacramento, Calif.; and Pittsburgh. Sacramento was the only market in the set to experience a decrease in RevPAR despite growth in ADR. None of these markets saw occupancy increase during the quarter.