CBRE: U.S. Occupancy Decline Breaks Seven Quarter Growth Streak
For the first time since the third quarter of 2016, the growth in the quarterly demand for hotel rooms in the United States fell short of the concurrent change in supply. Some of the resulting Q3 2018 decline in occupancy can be explained by unfavorable comparisons to Q3 2017 when major hurricanes impacted markets in Texas and Florida.
For the first time since the third quarter of 2016, the growth in the quarterly demand for hotel rooms in the United States fell short of the concurrent change in supply. Some of the resulting Q3 2018 decline in occupancy can be explained by unfavorable comparisons to Q3 2017 when major hurricanes impacted markets in Texas and Florida.
Occupancy drops, breaks seven-quarter growth streak
- Hotel demand grew 1.6% nationally in Q3, down from 3.1% in Q2. Supply growth remained at 2.0%.
- Pittsburgh had the largest year-over-year demand increase (9.2%). High gains also occurred in Phoenix (7.6%) and Raleigh-Durham (7.1%).
- National occupancy declined by 0.4% year-over-year, the largest drop since Q1 2016 and the second-largest since the last recession. The drop in occupancy is largely attributable to abnormally higher demand last year due to the Texas and Florida hurricanes.
- ADR grew by 2.1% nationally in Q3, well above the 1.5% rate in Q3 2017 but below the growth rate of the past three quarters.
- Thirty-eight of the 60 markets tracked by CBRE Hotels' Americas Research had supply gains of more than 2% in Q3, one more than in Q2. Thirty-four markets had declines in occupancy, 15 more than in Q2.