Highlights

  • Cold start, hot ending to the first week of December
  • New York City led the nation, by a mile, in absolute RevPAR
  • Hurricane-affected markets continued to see increases
  • Group demand unstoppable
  • Robust global growth continued for the ninth consecutive week

Strong finish to the week after Thanksgiving impact subsided

The U.S. hotel industry reported solid performance during the week ending 7 December 2024, lifted entirely by the second half of the week. Revenue per available room (RevPAR) over the first three days of the week, coming off the Thanksgiving weekend, produced negative year-over-year comparisons. On the flip side, the last three days of the week produced significant RevPAR gains.

— Source: STR— Source: STR
— Source: STR

Sunday RevPAR was down by double-digits, while Monday and Tuesday decreased at a lesser pace. By Wednesday, RevPAR improved, and the following three days produced double-digit gains. This was not unexpected as the same pattern occurred in 2019, which followed a similar calendar. We also believe the compressed period between Thanksgiving and Christmas this year is helping to fuel performance.

Overall, U.S. hotel RevPAR increased 4.3% with average daily rate (ADR) entirely responsible for the growth, up 3.8%. Occupancy barely moved, up 0.3 percentage points (ppts) compared to the same week last year. RevPAR on Sunday through Tuesday declined 7.1% on falling occupancy (-3.3ppts) and ADR (-1.2%). Wednesday improved, with RevPAR up 7.9%, lifted by ADR (+6.1%). However, Thursday through Saturday ruled the week as RevPAR increased 12.8% on nearly equal gains in ADR and occupancy. This pattern played out across all markets.

— Source: STR— Source: STR
— Source: STR

Eight of the Top 25 Markets posted double-digit RevPAR gains, impacted by events and football games (college conference championships and the NFL). Chicago posted the largest RevPAR gain (+42.9%), propelled by the calendar shift of the Radiological Society of North America (RSNA) conference from a week earlier in 2023. Las Vegas saw RevPAR grow 36.7% due to the AWS (Amazon Web Services) conference and the start of the Rodeo Convention and Cowboy Christmas.

St. Louis (+20.2%), Philadelphia (+17.1%) and Seattle (+15.5%) all recorded strong RevPAR gains, starting Wednesday and flowing into the weekend, impacted by strong event calendars as well as football. Minneapolis (+15.3%) and Detroit (+15.2%) rounded out the double-digit list with strong weekends boosted by football and events.

Tampa also saw positive RevPAR gains all week (+28.2%) driven by the continuing Hurricane Milton recovery efforts. Storm recovery also lifted performance in six other markets, including Augusta, Columbia, Florida Central South, Greenville/Spartanburg, North Carolina West, and Sarasota.

For the past six weeks, New York City has led the nation in occupancy, and this past week was no exception (89.9%). The city also led the nation in absolute RevPAR ($457), up 6.7%, eclipsing the next highest RevPAR market (Miami) by nearly $200 even though it was hosting Art Basel. The week’s RevPAR in New York was the second highest of the year, behind the week ending 28 September when it reached $487 during the UN General Assembly.

All chain scales improved following the cold start and hot finish for the week

For only the eighth time this year, RevPAR increased for all chains scales. Like in the previous week, Economy hotels led in RevPAR, posting growth every day of the week, partially a result of the Hurricane Helene and Hurricane Milton recovery efforts, which has a much greater impact on hotels in the lower classes. Even without the seven hurricane markets, Economy hotels still saw positive weekly RevPAR growth.

— Source: STR— Source: STR
— Source: STR

ADR dominated the gains for all chains scales with low to no occupancy gains for all chains scale except Economy. Once the Thanksgiving lull of the first three days passed, the last four days of the week produced a return to the bifurcated patterns seen for much of the year with mid-teen RevPAR gains in the top two chains scales while gains for the rest of the chain scales hovered around a healthy 10%.

— Source: STR— Source: STR
— Source: STR

Group demand is unstoppable after the Thanksgiving lull

Group demand among Luxury and Upper Upscale hotels grew 0.7%, which is notable given the weakness during the first three days of the week. Compared to 2019, which followed a similar calendar, group demand was just 75,000 rooms shy of 2019 levels. For the last four days of the week (Wednesday – Saturday), group demand rose 17.9% compared to last year reflecting the continuation of strong group demand seen for most of the year. Group ADR for the week increased 6.2%. Of the Top 25 Markets that saw double-digit RevPAR gains, all but Tampa saw significant group occupancy increases.

Transient demand declined 1.3%, while ADR grew 5.6%, and both had the same pattern as group but at more muted levels. The last four days for transient business was positive with demand up 1.5% and ADR up 8.3%.

— Source: STR— Source: STR
— Source: STR

Non-stop global growth continued; impact of China’s economic stimulus TBD

Global RevPAR, excluding the U.S., advanced 9.1% and has been holding close to this level for the past nine weeks, which is above the YTD RevPAR growth level (+6.8%). ADR continued to be the primary driver, advancing 7.6% while occupancy increased less than one percentage point to 67.1%. Across the largest countries in terms of room supply:

  • Japan continued to post robust RevPAR, increasing 26.6% entirely on ADR (+26.7%) with Kyoto (RevPAR: +62.4%) and Tokyo (RevPAR: +43.1%) posting the largest gains. All but two of the 11 Japanese markets recorded double-digit RevPAR growth.
  • Canada took second place with RevPAR rising 24%, lifted by the final concerts of Taylor Swift’s Eras Tour in Vancouver. RevPAR in Vancouver increased 145.1% with ADR rising 125.2% to USD$350. Weekend ADR increased 283.7% to USD$625. The market’s data for the week ending 14 December will also show solid gains given that the final concert of the entire tour was on Sunday, 8 December.
  • RevPAR in Mexico rose 17.3% on the heels of the prior week’s 41.8% increase. All but three of the 12 markets saw double-digit RevPAR growth, led by Yucatan/Campeche (+42%) and Baja (+37.6%).
  • France followed with a healthy 16.8% RevPAR increase with the Paris market posting a 21.5% RevPAR increase lifted by the reopening of Notre Dame Cathedral.
  • China posted a modest RevPAR decline of 1.7% due mostly to following ADR. Six of the of the 10 largest markets, based on supply and which accounts for almost half of the available rooms, saw RevPAR growth with the measure rising 9.5% in Shanghai.
— Source: STR— Source: STR
— Source: STR
— Source: STR— Source: STR
— Source: STR

Final Thoughts

December is off to a strong start as expected due to the compressed period between Thanksgiving and Christmas. AAA projects a record number of holiday travelers to close out 2024. However, our holiday forecast calls for modest growth due to the movement of Christmas and New Years to Wednesday from Monday a year ago. We were wrong with our Thanksgiving forecast, and we would be happy to be wrong again.

Looking further ahead, occupancy on the books in January shows net positive. February is flat, and March is showing higher YoY levels because the Easter and Passover observances occur in April next year. Global performance seems unstoppable and is expected to continue growing RevPAR through ADR for the foreseeable future.

— Source: STR— Source: STR
— Source: STR

About CoStar Group, Inc.

CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France's leading commercial real estate news service. Thomas Daily is Germany's largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group's websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.

This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that future media events will not sustain an increase in future occupancy rates. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as CoStar's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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