Hotel Demand, Occupancy, RevPAR & ADR All Improve in 2022

Executive Summary

• Hotel real estate fundamentals improved across the board year-over-year in Q4. Demand increased by 3.6%, occupancy gained 3.6%, revenue per available room (RevPAR) rose by 16.2% and the average daily rate (ADR) grew by 12.1%.
• So far in 2023, total daily airline passengers in the U.S. have exceeded 2019 levels. The easing of travel restrictions in Asia also is expected to boost travel demand in gateway markets, destination locations and on the West Coast.
• Average hourly hotel wages for non-supervisory workers continued to lag the national average by nearly $10. However, hotel wage growth was roughly 37% more than the national average wage growth near the end of Q4. Labor shortages could result in further wage pressure.
• Southern markets remained the strongest performers relative to 2019. RevPAR in core urban markets, which had lagged, grew the fastest in Q4 2022 on a year-over-year basis.
• RevPAR for all location types exceeded 2019 levels in Q4 2022, with resort and interstate hotels posting the strongest relative growth.
• Total bookings increased nearly 4% year-over-year, driven by an increase in corporate (GDS) and group reservations of 30% and 18%, respectively.