PUT THIS PIECE of news in the “it was good while it lasted” category: The U.S. hotel industry in September ended its record streak in month-to-month RevPAR growth.
But don’t panic, says an expert, there is a good reason for the decrease.
STR reported on Oct. 19 that year over year, RevPAR in September declined by 0.3 percent, averaging $89.10. “The slight dip in RevPAR broke the industry’s 102-month streak of year-over-year growth in the metric,” said an STR news release. The run began in March 2010, and it was the longest on record.
“Very important to state: This is not the beginning of a downturn,” said Jan Freitag, senior vice president of lodging insights at STR, said in the statement.
“The industry smashed the monthly demand record last September because of the rush of post-hurricane business in Houston and parts of Florida. That created a level of demand that the industry fell just short (minus 0.1 percent) of matching this September. In fact, that slight dip in demand was the first year-over-year decline in the metric since August 2015.”
Still, the September decline did drag down overall performance for hotels in the third quarter, according to STR Senior Vice President of Operations Bobby Bowers.
In other metrics, average occupancy was 68 percent, a drop of 2.1 percent over September 2017, and ADR was up by 1.9 percent to $131.
“When you look past the monthly year-over-year comparison, you will see that each of the key metrics were well above the long-term average for September and just barely ahead of the 2018 year-to-date average,” Freitag said.
“The industry remains on solid footing even as RevPAR growth slows.”
Houston, Texas, reported the largest decreases in each of the three key performance metrics: occupancy, down by 30.8 percent to 59.1 percent; ADR was $105.75, a 7.7 percent decline; and RevPAR dropped by 36.2 percent to an average of $62.48.
“Houston’s hotel performance was lifted in the weeks and months that followed Hurricane Harvey in 2017 as properties filled with displaced residents, relief workers, insurance adjustors, media members, etc.,” said STR.
Orlando, Florida, saw the only other double-digit declines in average occupancy of 11.6 percent to 67.2 percent, and average RevPAR was down by 12.5 percent to $73.95.