Q4 Hotel RevPAR Declines by 1.9%

U.S. Hotel | Q4 2023

January 30, 2024 2 Minute Read

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Executive Summary

  • A 1.8% year-over-year decrease in hotel demand and a 0.8% increase in supply led to a 2.5% drop in occupancy in Q4 2023. Occupancy declines were partially offset by a 0.7% increase in average daily rates (ADR), resulting in a 1.9% decrease in revenue per available room (RevPAR) during the quarter.
  • Competition from other lodging sources like short-term rentals and cruise lines, as well as continued strength in outbound international travel, was a headwind to hotel demand in Q4.
  • The average hourly wage for hotel workers remained more than $10 less than the national average hourly wage. Hotel wage growth of 4.9% in Q4 slightly outpaced the national average of 4.4%.
  • Five western markets were the strongest RevPAR performers relative to Q4 2019. On a year-over-year basis, several smaller secondary markets were among the strongest performers.
  • Occupancy rates for all location types were below 2019 levels in Q4. Interstate locations were the closest to their 2019 level at 99%, while urban locations lagged at 92%.
  • Total room nights sold fell by 1.8% year-over-year, driven by decreases in Group, Online Travel Agency (OTA), Property Direct and Voice bookings. Global distribution system (GDS) demand grew the most at 4.6%.