The U.S. hotel industry saw year-over-year gains in both occupancy and average daily rate during May, according to STR, but rate growth was more modest than in recent months. Occupancy rose 0.7 percent to 68.2 percent, and ADR increased 2.6 percent to $129.90.
"We had seen ADR increases of more than 3 percent in March and April," said STR SVP of operations Bobby Bowers. "So that same level of pricing power wasn’t there, but with demand accelerating and supply growth remaining moderate, the industry looks to be in great shape as we hit the busy summer season." May marked the 99th consecutive month of revenue per available room growth for the U.S. hotel industry.
Among the top 25 markets by room supply, Norfolk/Virginia Beach reported the greatest year-over-year bump in occupancy, 5.1 percent to 69.1 percent, and San Francisco/San Mateo saw the largest jump in ADR, 8 percent to $235.47. Denver posted the largest year-over-year dips in both occupancy, 7.8 percent to 75 percent, and ADR, 2.8 percent to $128.81. Though the industry has yet to be majorly impacted by supply growth, according to Bowers, some markets, such as Boston and Seattle, are feeling the effects despite strong demand.