U.S. Hotel Industry Faces Decreased Occupancy and Increased Development in September 2024 :: Hospitality Trends

• The U.S. hotel industry experienced a 2.5% decrease in occupancy and a 1.3% drop in Revenue per Available Room (RevPAR) in September 2024 compared to the same month in 2023.
• Despite the decline in occupancy and RevPAR, the industry saw a 7% YoY increase in rooms under construction, marking seven consecutive months of growth.

The U.S. hotel industry experienced lower occupancy rates and RevPAR in September 2024 than the previous year. This decline was primarily due to a change in the calendar composition of the month, which featured one less weekend than September 2023. While there was a slight increase in group demand, it was insufficient to offset the overall decrease in room demand.

However, Luxury and Upper Upscale hotels exceeded 2019’s group room demand. Despite the overall decrease in RevPAR, these top chain scales saw favorable comparisons, primarily driven by an increase in Average Daily Rate (ADR) and, for luxury hotels, a rise in occupancy.

Regarding market segmentation, group demand was notably higher than in 2023, influenced by the Jewish calendar shift from September 2023 to October 2024. This surge in group demand led to a decrease in transient demand, which remained above 2019 levels.

The Top 25 U.S. markets outperformed the rest of the industry, with RevPAR up 1.2% due to a 2.8% increase in ADR. Houston, Chicago, and Anaheim reported the largest RevPAR gains among these markets.

In terms of development, the industry saw a 7% YoY increase in the number of rooms under construction in September 2024, marking the seventh consecutive month of growth. This trend signals a continued investment in the hotel industry despite the current downturn.

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