U.S. Market Recovery Monitor - 10 September - STR

Excerpt from STR

Based on the latest week of data (4-10 September 2022), and accounting for a holiday calendar shift, the 3-day Labor Day weekend (Friday – Sunday) in the U.S. was the second best behind 2021.

For the three-day period, 12.1 million rooms were sold, which was 27,000 less than in 2021 and 79,000 more than in 2018, which was the previous Labor Day weekend record before last year. Additionally, from Wednesday to Saturday, the industry saw its highest demand for the post-Labor Day days. Despite the solid Labor Day finish, total weekly room demand fell 1.9% week on week (WoW) as the industry continued its seasonal slowdown.

The week-on-week decline, however, was significantly less than in the years prior to the pandemic. Weekly occupancy reached 61.7%, which was down from 62.8% in the prior week. Nominal average daily rate (ADR) dropped 0.5% WoW to US$147, which was 15.2% higher than a year ago. Weekly nominal revenue per available room (RevPAR) decreased 2.3% WoW to US$91, its third straight week below US$100 but 24% better than in 2021. Accounting for the shift in the holiday, both real ADR and RevPAR were above 2019 (+5% and +6%, respectively).

The days following the Labor Day holiday, adjusting for the shift over the years, had the highest demand for those post-holiday days going all the way back to 2000. In fact, if you compare against the previous 20 Labor Day through end-of-year periods, the Saturday of Labor Day 2022 was the third best. This continues to point to the strength of leisure demand despite high inflation, market turmoil, and increased economic uncertainty.

Business travel also appears to have rebounded somewhat after the holiday, too. Top 25 Market midweek (Wednesday & Thursday) occupancy increased to 65% from 61% in the prior week. Occupancy on those two days ranged from 89% in New York to 40% in New Orleans. Boston, Denver, Los Angeles, San Diego, and San Francisco all reported midweek occupancy, and occupancy was up in all but nine of the Top 25 Markets. For the full week, Top 25 Market occupancy fell 1.3 percentage points WoW to 64% given the normal weakness seen on the actual holiday and day after (Monday & Tuesday).

Like the Top 25, Central Business Districts (CBDs) saw midweek occupancy growth, reaching 64% after falling to 56% before the Labor Day holiday. Occupancy in Boston CBD increased to 90%, up 10 percentage points WoW. The New York Financial District also saw a sharp gain (+17 percentage points WoW) as occupancy neared 90%. Denver, Nashville, Seattle, and San Diego all reported midweek occupancy above 70%. However, not every CBD saw solid midweek occupancy, with New Orleans (34%) and Atlanta (45%) at the bottom. Six of the 20 CBDs saw midweek occupancy fall week over week. For the entire week, CBD occupancy reached 62%, which was down 0.7 percentage points WoW.

Driving some of the midweek gain was an increase in group business, where midweek demand reached a six-week high. Group demand in Boston, Los Angeles, New York, Orlando, Phoenix, San Diego, and Washington, D.C. saw significant week-on-week gains. More importantly, those markets saw their highest midweek group demand of the past five weeks, which bodes well for the remainder of the conference season.

Among the chain scales, midweek occupancy also jumped week to week. Adjusting for the holiday shift, lower-tier chain scales reported higher midweek occupancy in 2022 as compared to 2019 with the upper-tier lagging. Upper Upscale reported midweek occupancy of 64%, down 3 percentage points from the comparable week in 2019. Upscale, a favorite of transient business travelers, reported midweek occupancy of 66%, -0.5 percentage points versus 2019.

Click here to read complete article at STR.