STR: 2016 “Average” for U.S. Hotels
New York, Los Angeles post strong results
The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during 2016, according to data compiled STR. Compared with 2015, occupancy was nearly flat (+0.1 percent, to 65.5 percent), and average daily rate (ADR) rose 3.1 percent to $123.97. As a result, revenue per available room (RevPAR) grew 3.2 percent, to $81.19.
“In general, we view 2016 as an average year for the U.S. hotel industry,” said STR president and ceo Amanda Hite. “The three key performance metrics hit record highs, but at the same time, RevPAR growth (+3.2 percent) was just below the 30-year U.S. average (+3.3 percent). Looking ahead in 2017, we expect that growth to decelerate further as supply overtakes demand in terms of growth.”
The absolute values in the three performance metrics were each the highest STR has ever benchmarked. The U.S. hotel industry also set records for supply (more than 1.8 billion room nights) and demand (more than 1.2 billion room nights). Based on percentage growth for the year, demand (+1.7 percent) slightly outpaced supply (+1.6 percent). The supply growth figure was the largest for the industry since 2010.
In absolute values, New York—home to Boutique Design’s annual Boutique Design New York (BDNY) trade/fair conference in November—recorded the highest levels in occupancy (85.9 percent), ADR ($259.14) and RevPAR ($222.54).
Among the nation’s 25 largest markets, Los Angeles/Long Beach, California, posted the year’s only double-digit increase in RevPAR (+10.8 percent, to $139.65). The increase was primarily driven by the largest rise in ADR (+8.5% to $171.80). Occupancy in the market was up 2.2 percent to 81.3 percent. Los Angeles will host the next BDwesttrade fair/conference in April.
Norfolk/Virginia Beach, Virginia, saw the largest occupancy increase (+5.0 percent, to 59.9 percent) and the second-largest lift in RevPAR (+8.2 percent, to 59.46). Overall, 20 of the Top 25 Markets recorded year-over-year RevPAR growth for the year.
Houston reported the steepest declines in each of the three key performance metrics. Occupancy in the market fell 9.1 percent to 62.3 percent; ADR was down 3.6 percent to $104.65 and RevPAR dropped 12.4 percent to $65.15.
Miami/Hialeah, Florida, was the only other market to report decreases in the three metrics. Occupancy decreased 2.7 percent, to 75.9 percent; ADR dropped 2.9 percent, to $189.77; and RevPAR fell 5.5 percent, to $143.95.