IT WAS ANOTHER record setting year for the U.S. hospitality industry in 2019, according to STR. However, it was also the slowest growth for RevPAR the industry has seen since the recession.
Compared to 2018, occupancy growth remained flat at 66.1 percent while ADR rose 1 percent to $131.21 and RevPAR went up 0.9 percent to $86.76. Absolute ADR and RevPAR for the year were the highest STR has bookmarked while the addition of more than 1.9 billion room nights available and roughly 1.3 billion room nights sold means both supply and demand rose 2 percent.
“The industry turned in another record year in terms of rooms available, rooms sold and rooms revenue,” said Amanda Hite, STR’s president. “As was documented throughout 2019, however, RevPAR growth came in lower than any year since the recession and well below the long-term historical average of 3.2 percent. With supply and demand growing in equilibrium, ADR is the sole driver of RevPAR gains. Unfortunately, with ADR rising below the rate of inflation, revenue growth is not keeping up with rising costs, such as increases in wages. That is a concern for owners and operators alike.”
Hite said STR is not forecasting a significant change in fundamentals for the near future.
“Supply growth has remained manageable at the national level, but there is an uneven amount of new inventory in the limited-service sectors as well as certain major markets,” she said. “That is where we will see the greatest challenges as the industry embarks on another year of low performance growth levels.”
Phoenix, experienced the highest rise in occupancy, up 1.6 percent to 70.7 percent, and RevPAR, rising 4.5 percent to $94.23. Super Bowl LIII host Atlanta reported the year’s largest lift in ADR, a rise of 4.2 percent to $114.54.
Denver and Tampa/St. Petersburg, Florida, tied the record for the second-highest increase in occupancy with a rise of 1.3 percent to 73.9 percent and an increase of 1.3 percent to 72.3 percent respectively. Denver also registered the second-largest spike in RevPAR, going up 4.3 percent to $100.27.
Seattle saw the steepest decline in RevPAR, dropping 4 percent to $118.86 after supply growth in the city slipped to 5.9 percent. Houston posted the largest drop in ADR, losing 3.2 percent to $101.89.
In the fourth quarter of 2019, U.S. hotel occupancy fell 0.1 percent to 61.8 percent, ADR was up 0.7 percent to $128.94 and RevPAR increased 0.7 percent to $79.69. That quarter was capped in December by a 0.6 percent increase in occupancy to 54.4 percent, while ADR and RevPAR rose 2 percent to $126.84 and 2.6 percent to $69 respectively that month.
Red Roof President Zack Gharib, far right, participates in a panel discussion at AAHOA’s 2025 Convention and Trade Show.
