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STR: US hotel performance for February 2016

March 26, 2016 Hotel Trends No Comments Email Email

The U.S. hotel industry reported positive results in two of the three key performance metrics during February 2016, according to data from STR.

In year-over-year results, the U.S. hotel industry’s occupancy dipped 0.8% to 61.7%. However, average daily rate for the month was up 3.6% to US$120.80, and revenue per available room increased 2.8% to US$74.50.

“RevPAR growth was below the long-run average of +3.1% for all Februarys in our system,” said Jan Freitag, STR’s senior VP for lodging insights. “The last time February RevPAR growth was +2.8% was in the year 2008, when we were on a downward trajectory, and this is certainly not 2008.  But it’s just not great.”

Freitag also noted that RevPAR has grown year over year for 72 consecutive months. And while occupancy is on a declining trajectory, the 61.7% absolute level for the month was the second highest on record for February.

Among the Top 25 Markets, Super Bowl 50 host San Francisco/San Mateo, California, posted the largest increases in ADR (+28.1% to US$249.36) and RevPAR (+31.5% to US$203.43). Occupancy in the market rose 2.7% to 81.6%.

Los Angeles/Long Beach, California, was the only other market to report a double-digit rise in ADR (+12.9% to US$175.29) or RevPAR (+17.7% to US$146.34). Occupancy in the market increased 4.2% to 83.5%.

The largest occupancy increase was experienced in St. Louis, Missouri-Illinois (+4.9% to 60.2%), while the steepest decline in the metric came in Denver, Colorado (-7.8% to 66.2%).

New York, New York, reported the largest drop in ADR (-7.4% to US$186.36).

Houston, Texas, saw the steepest decline in RevPAR (-9.6% to US$77.18).

“RevPAR growth in the Top 25 Markets was the same as in all other markets (+2.7%),” Freitag said.  “Because supply growth in the large markets is now +1.9%, the occupancy decline (-1.0%) was steeper than for all other markets (-0.7%). Pricing power is still stronger in the large metros (+3.7% vs. +3.4%), but both growth rates are pretty weak.”

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