US Hotels’ December Sends 2018 Out Quietly
December’s U.S. RevPAR increase was primarily rate-driven as ADR and demand growth continued to slow and the number of hotel rooms in construction increased for the third consecutive month.
HENDERSONVILLE, Tennessee — December RevPAR increased 1.9%, driven by ADR growth of 1.8%. And yes, it is December and a slow month anyway, but tepid ADR growth is likely and unfortunately a sign of things to come.
Occupancy has now grown zero-point-something for seven months and declined in two months this year. December ADR growth was second lowest this year. RevPAR and ADR growth were the lowest growth in a December since the upturn started post-2009.
1. More on the KPIs
Hoteliers sold 87.5 million roomnights—of course the highest ever for a December—and 20 million more roomnights than in December 2007, and we thought that things were going really well back then. The demand increase of 1.8 million roomnights when compared to last year is only a 2.1% increase, which is the third-lowest increase in 2018. The three lowest-growth months all happened in the second half of the year. Supply growth in December was 2%, as it has been for the last nine months in a row.
Because supply growth and demand growth are still in slight imbalance in favor of demand growth, occupancy increased to a new December record of a whopping 54.1%, so basically half of the rooms in the U.S. were empty.
Here is an interesting observation: December 2018 saw the highest total occupancy ever, but a lower ADR growth than in any December this up-cycle:
