Skift Take

This is more of a symbolic than substantive win for U.S. hotels. That said: growth is growth, and operators should be happy.

U.S. hotel operators have reason to celebrate, but they shouldn’t get too cocky with this performance win.

Revenue per available room — the hotel industry’s key performance metric — was up 5.7 percent last week from the same period in 2019, according to STR. This is the first sign of growth from pre-crisis levels and comes after weeks of U.S. hotels surging forward in their occupancy recovery.

All hotel sectors apart from luxury and upper upscale saw revenue gains over 2019 levels last week. Though, the luxury sector did post the highest jump in daily room rates, with a nearly 23 percent increase. While the average U.S. hotel occupancy rate actually fell last week to a little more than 65 percent, daily rates increased by nearly 6 percent.

Industry analysts have used 2019 as their benchmark since earlier this year, given how the pandemic last year produced record levels of low performance and isn’t seen as a reliable metric.

Overall U.S. hotel performance this summer is much better than the 27 to 33 percent declines off pre-pandemic room revenue levels seen this spring, according to a Truist Securities report from late last month.

“Last week was all about Independence Day, and very strong leisure demand materialized,” said Patrick Scholes, managing director of lodging and experiential leisure equity research at Truist Securities.

China last October was the first country in the world to see hotel growth over pre-pandemic levels. The country more recently faced a setback in its recovery due to an outbreak of new cases.

But there are some caveats to the good news in the U.S.

Leisure travel continues to account for a vast majority of the travel happening in the U.S. That means cities relying more on business travel still have a hefty recovery ahead of them. Revenue at U.S. urban hotels in May was still down 52 percent from the same month in 2019, the American Hotel & Lodging Association reported this week.

A favorable calendar this year with July 4th falling on a weekend coupled with unprecedented leisure travel demand helped. July 4th in 2019 fell on a Thursday, which meant business travel essentially hit a pause.

STR also noted occupancy rates fell more than four points last week to 65.4 percent. The positive revenue growth is likely more the result of a calendar shift than it is a sign of an emerging pattern, a company spokesperson told Skift via email.

But there are signs next week could be another strong showing for the U.S. Saturday night occupancy rates eclipsed 76 percent, and the Sunday holiday followed by the Monday observance means a lot of people extended vacations into this week.

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Photo credit: Leisure travel around the July 4th holiday buoyed U.S. hotels to the first bit of two-year revenue growth since the start of the pandemic. BruceEmmerling / Pixabay

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