CBRE: Early Easter Holiday Slightly Lowers Q1 Hotel Market Performance

Executive Summary

• A 1.4% year-over-year decrease in hotel demand and a 0.6% increase in supply led to a 2.0% drop in Q1 occupancy. A 0.1% decline in average daily rates (ADR) resulted in a 2.1% decrease in revenue per available room (RevPAR).
• The slight drop in year-over-year fundamentals is partially due to the Easter holiday season falling in Q1 this year vs. Q2 last year. Business travel historically drops in the days just before and after Easter.
• Hotel demand continued to be pressured by competition from other lodging sources, such as short-term rentals and cruise lines, as well as record outbound international travel.
• Hotel wage growth accelerated in Q1 to 5.5% from 4.9% in Q4, outpacing the national average of 4.5% for all industries. However, the average hourly hotel wage remained about $10 lower than the overall national average.
• Half of the top 10 year-over-year RevPAR growth markets were smaller secondary metros. West Coast markets like Seattle and San Jose posted strong year-over-year gains, as did larger markets like New York City, Washington, D.C. and Boston.
• Occupancy rates for all location types were below 2019 levels in Q1. Interstate and town locations were the closest to their 2019 level at 99%, while urban locations were at 92%.
• Brand.com continued to take share from other distribution channels, increasing by 3.5 percentage points to 21.6% compared with Q1 2019.

Related Document