US Hotel Room Rates Hit Record High Prices Despite Occupancy Remaining Below Pre-Pandemic Levels
That pesky "Putin-flation" sure is running rampant. It seems like scorching inflation is still unfolding in nearly every sector, including the price of hotel rooms, according to a new report.
The national average daily rate for a room in March rose to $146.61, marking its highest level for any month on record, according to a new writeup by BisNow.
STR, who provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry, reported this week that the average daily rate (ADR) rose 10.9% from pre-pandemic figures (March 2022 vs. March 2019).
Occupancy, however, slid -6.2% to 64%, the release notes, while revenue per available room (RevPAR) was up 4% to $93.82.
Of all major U.S. cities, Tampa experienced the highest occupancy level (84.7%) even though it was still down 3.6% from 2019. None of the top 25 markets saw an increase in occupancy over 2019, the firm reported.
And of course, the steepest decline in occupancy came from none other than San Francisco, which saw a stunning -23.4% dropoff in occupancy from March 2019.
In total, U.S. hotels sold 6.6 million in group room nights versus 7.8 million in 2019. Despite the decline in occupancy, "urban hotels increased their average daily room rates 56% month-over-month, while airport locations were up 42%," the report says.
CoStar National Director of Hospitality Jan Freitag commented to BisNow: “Easter and spring break are just the two obvious indicators of continued pricing power for the U.S. hotel industry driven by, as we had said repeatedly before, very healthy leisure demand.”
"I'm very, very interested in seeing what the summer holds with regards to pricing power," Freitag concluded.