Demand for U.S. hotel room nights grew 2.5 percent year over year in 2018, compared with 2 percent growth in supply, according to STR. In raw numbers, a record 1.3 billion room nights sold in 2018, while the supply of room nights totaled more than 1.9 billion.
Occupancy, meanwhile, hit a record 66.2 percent, growing 0.5 percent. Occupancy at each upper-upscale and upscale hotels dropped, and STR expects another decline in 2019. Occupancy for the 25 markets with the most rooms declined 0.1 percent. Philadelphia had the highest increase, rising 3.8 percent to 71.1 percent. Average daily rate grew 2.4 percent to $129.83. ADR for the 25 largest markets rose 2.7 percent, led by Miami, which increased 6.1 percent to $199.35. Revenue per available room grew for the ninth year in a row, inching up 2.9 percent to $85.96. That rate was slower than the long-term average rate of growth. All hotel classes recorded gains. RevPAR for the 25 largest markets grew 2.5 percent. Minneapolis reported the largest spike, growing 6.9 percent to $82.96.
The biggest drops in the three metrics all occurred in Houston, thanks to the exaggerated demand the prior year related to Hurricane Harvey; occupancy fell 5.3 percent year over year in 2018 to 63.1 percent, ADR dipped 2.4 percent to $105.45 and RevPAR dropped 7.5 percent to $66.57.
Q4 2018
During the fourth quarter, U.S. hotel occupancy rose 0.4 percent to 61.9 percent, ADR increased 2 percent to $127.95 and RevPAR increased 2.4 percent to $79.21. Among the 25 largest markets, San Diego saw the largest increase in RevPAR, rising 12.4 percent to $113.92, primarily because it had the biggest jump in ADR, 7.8 percent to $155.74. Boston recorded the largest rise in occupancy, 6.3 percent to 75.2 percent.
Houston reported the largest declines in all three metrics: occupancy decreased 19.3 percent to 58.5 percent, ADR dropped 7.1 percent to $102.26 and RevPAR sank 25.1 percent to $59.82.