Hotel Performance in August Follows Seasonal Pattern
August performance data from STR and CoStar shows more evidence of a slow return of groups to U.S. hotels.
During the month, U.S. hotel occupancy reached 69.6%, which was a 2.4% decline from August 2019. Average daily rate was $155.58, a 15.6% increase over pre-pandemic levels; and revenue per available room was $108.25, which was a 12.9% increase.
Jan Freitag, national director for hospitality analytics for CoStar Group, said U.S. hotel group demand is about 10% of prior peaks, but that gap should tighten in September and October.
"August is, of course, not a strong corporate meeting month, so all eyes are on September and October, when we will — I think — see healthy group activity," Freitag said.
High average daily room rate has been essential to hotel profitability in 2022, and group rates are increasing as well, Freitag said.
"Group rates continue to increase and are now 13% higher than they were in 2019. But it is worth pointing out that they are $20 below May’s rate," he said.
Investors Interested in Highway Hotels
On the sales side, Freitag said there has been a lot of transactions activity around interstate hotels, which he added are "very much on the radar for investors."
"In 2019, $1.1 billion of hotels near interstates were sold. So far this year through July, the total amount is $1.2 billion," Freitag said.
Copyright 2022 CoStar Group. All rights reserved. From https://www.costar.com. By Dan Kubacki, Hotel News Now.