Occupancy Gains Return Due to Solid Demand Growth

  • Hotel demand grew 2.5% nationally in Q4, up from the 1.6% rate in Q3. Supply growth remained at 2.0%.
  • Of the 60 markets tracked by CBRE Hotels’ Americas Research, Raleigh-Durham had the largest year-over-year demand increase (10.7%). High gains also occurred in Boston (10.3%) and Milwaukee (8.0%).
  • National occupancy grew by 0.4% year-over-year. This was a reversal of the previous quarter’s decline, but less than the Q4 2017 rate of 1.6%.
  • ADR grew by 2.0% nationally in Q4, more slowly than in Q4 2017 (2.5%). RevPAR grew by 2.4% year-over-year in Q4, also at a slower pace than a year ago (4.1%).
  • Twenty-nine of the markets tracked by CBRE had supply gains of more than 2.0% in Q4, nine fewer than in Q3; 30 markets had declines in occupancy, four fewer than in Q3.
  • Strong ADR gains (7.8%) gave San Diego a RevPAR increase of 12.4%, the largest gain of any market in Q4. Boston (12.2%) and Raleigh-Durham (11.9%) also had high RevPAR gains.
  • Of the top-10 markets for RevPAR growth, eight had increases driven primarily by occupancy, two more than in Q3. Boston produced its RevPAR gain with nearly balanced occupancy and ADR increases.