HENDERSONVILLE, Tenn. — For the week of November 5 to 11, global occupancy, excluding the U.S., has improved following a year-over-year decline the week before. Occupancy increased 3.9 per cent week-over-week (WOW) to 68 per cent. YOY, occupancy also continued to improve at a much faster rate than the U.S., increasing seven per cent compared to the same week last year. Weekly global ADR increased 10 per cent YOY, keeping RevPAR growth in double figures (up 17.6 per cent).
RevPAR among the top 10 countries (based on supply) increased 24.2 per cent YOY on an 11.1-per-cent gain on ADR. Occupancy rose 7.4 per cent. Every country saw RevPAR growth except Mexico, which declined on falling ADR. Five of the top 10 reported double-digit increases, led by China, Japan, Spain, Germany and Indonesia, with most of those countries seeing equal gains in both occupancy and ADR. Japan and Spain were the exception as ADR accounted for most of the RevPAR growth.
For the past six weeks, China has contributed an average of five percentage points to the growth in global RevPAR via rising occupancy. This week, China’s occupancy increased by 15 per cent with ADR gaining 23.3 per cent, resulting in 61.3 per cent RevPAR growth.
RevPAR in Mexico has fallen for more than 20 weeks, mostly on decreasing ADR. Most of the ADR decrease is coming from Mexican Caribbean hotels, which have seen steep decreases since April. Over the past three weeks, the declines have lessened from double-digits ones to down one per cent this most recent week. Outside of the top 10, performance was led by El Salvador at 84.5 per cent (up 12.2 per cent YOY); French Polynesia at 81.1 per cent (up 1.5 per cent YOY); Serbia at 80.6 per cent (up 7.5 per cent YOY); and the U.A.E. at 83.4 per cent (up 1.5 per cent YOY).
The U.S. hotel industry re-emerged from the Halloween induced slowdown with occupancy increasing to 64.8 per cent, up 5.2 per cent from the prior week and 0.5 per cent YOY. ADR increased four per cent YOY, re-starting the three-per-cent plus growth streak that halted the previous week. Prior to that decline, ADR had grown three per cent or more for six weeks straight. RevPAR improved 4.9 per cent YOY, which represented the largest weekly increase since early October.
All top 25 markets in the U.S. saw weekday RevPAR gains except Atlanta, New Orleans and San Diego. The two markets posting the largest weekday RevPAR gains were Las Vegas (up 27.1 per cent) and Dallas (up 24.7 per cent). Overall, 13 of the top 25 reported double-digit weekday RevPAR growth.
Looking ahead, U.S. hotel occupancy will plunge the week ending November 25 due to Thanksgiving. Looking at the past 10 Thanksgivings (excluding 2020 and 2021), demand has fallen WOW by an average of 21 per cent, resulting in a 13-per-cent drop in occupancy. ADR follows, averaging 10 per cent less than the week prior to Thanksgiving. Altogether, RevPAR falls by nearly 30 per cent versus the week before the holiday.
STR expects that this Thanksgiving week will follow past results with occupancy near 50 per cent. The 10-year average is 49.6 per cent and has ranged from 45.2 per cent in 2011 to 52 per cent in 2018. In 2019, occupancy was 50.6 per cent. As in past years, ADR will decrease WOW, but it should be up around 2.5 per cent YOY. As a result, weekly RevPAR comparisons will likely remain positive despite the lower demand.
