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U.S. Hotels – May 2022 Commentary

May 2022 Top-Line Metrics (percentage change from May 2019)

  • Occupancy: 65.1% (-5.0%)
  • Average daily rate (ADR): US$149.91 (+13.4%)
  • Revenue per available room (RevPAR): US$97.53 (+7.7%)

 

May 2022 Profitability Levels

  • GOPPAR: US$88.63
  • TRevPAR: US$219.58
  • EBITDA PAR: US$67.80
  • LPAR (Labor Costs): US$66.27

 

Key points from the month:

  • A three-day calendar shift influenced U.S. hotel performance trends, leaving the metrics slightly weaker than the previous month.
  • An extra weekday on the calendar contributed to higher group demand, which reached a pandemic-era high in May.
  • GOPPAR came in lower than April but remained above the 2019 comparable.
  • While the Top 25 Markets followed the wider U.S. trend of softened occupancy, the major metros also saw weekday occupancy improve incrementally, pointing to increased business travel and continued recovery.
  • With increased business demand, the Top 25 Markets are showing improved profit levels.
  • F&B revenues are gradually moving closer to 2019 levels, but catering and banquet revenues continue to lag.
  • Rooms in construction continued to slow, and while rooms in planning grew, the pace decelerated, suggesting that rapidly rising interest rates will likely stymie new development.

 

Segmentation

The silver lining for the weekday-heavy calendar during May came in group demand, as an additional Monday and Tuesday offered added opportunity in the group rebuild. As such, group demand continued a month-over-month and 2022-over-2019 climb, with more than 7.5 million room nights sold in May. Overall, group demand was 11.8% below the pre-pandemic level.

The gap between transient and group demand is rapidly narrowing as well.

Top 25 Markets

The list of top and bottom performers within the Top 25 Markets rarely changes, and the following markets have been in almost the exact same positions for just over two years now.

It is worth mentioning that while New York City officially moved off the bottom performers list, it was replaced by Chicago. However, momentum has been building in the windy city.

Weekday occupancy picked up a touch from April, while weekends got a massive boost.

Both the Top 25 and all other market aggregates reported small declines in occupancy percent change compared with 2019. Of the Top 25 Markets, only Phoenix beat pre-pandemic occupancy levels.

Latest Weekly Data

The last full week of June (ending 25 June) produced the highest occupancy of the pandemic-era (72.3%) and the second highest ADR (nominal: US$157.05) ever recorded. Read more in our latest Market Recovery Monitor.