The full-year numbers are in from STR parent company CoStar, and they confirm that last year's high hotel room rates were unprecedented. Both the average daily rate and revenue per available room were the highest on record for U.S. hotels, the data and analytics company revealed today.
For the year, ADR came in at $155.62, a 4.3 percent increase over 2022, and RevPAR was $97.97, which was up 4.9 percent year-over-year. Occupancy was essentially flat at 63 percent, representing a slight uptick of 0.6 percent over the previous year. Still, that was the highest occupancy seen since 2019.
Increases were particularly pronounced in the country's top 25 markets, which revealed higher occupancy and ADR than all other markets. New York City led the top markets, scoring the highest in all three key performance metrics: Occupancy grew 8.8 percent year-over-year to 81.6 percent; ADR was up 8.5 percent to $301.22; and RevPAR skyrocketed by 18.1 percent to $245.77.
Only two of the top markets experienced RevPAR decreases in 2023: New Orleans dropped by 6.8 percent to $100.40, and Miami decreased by 6.7 percent to $159.22.
Planning for the future
Looking ahead, despite some uncertainty around the economy and upcoming elections, the planning phases of the U.S. hotel pipeline indicate continued confidence in travel. There are 318,597 rooms in the planning stage — up by a whopping 32.7 percent year-over-year, according to CoStar's December 2023 stats, and 255,039 rooms in the final planning stage, representing a 19.7 percent increase over a year ago. Rooms under construction did drop by 4.5 percent, which was not as pronounced as the decrease reported in the two months prior.
The hotel construction pipeline continues to be dominated by projects in the upper-midscale and upscale segments, neither of which tend to indicate new supply for the meetings market. That said, the 6,631 rooms under construction in the luxury segment represent 4.7 percent of the existing supply, the strongest segment in terms of percentage growth. The 19,112 rooms under construction in the upper-upscale segment trails only upper midscale (42,467 rooms) and upscale (34,457 rooms).
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