The U.S. hotel industry still is setting records, but its RevPAR failed to hit the 6% growth threshold for the first time this year.
But with new records comes some softening in certain metrics.
1. Get ready for more records
Occupancy ended the month at 67.5%, the highest tally ever recorded during May, while demand broke an unprecedented 104 million roomnights, according to data from STR. Annualized occupancy, meanwhile, is still at 65%, which means all key performance indicators are again at new record levels on an annual basis.
2. RevPAR just missed the 6% mark
With a 5.9% increase in May, revenue per available room missed the 6% mark for the first time this year. But keep in mind that last year RevPAR growth was 9.7%, which was the strongest May RevPAR growth ever. Given that tough comp, a 5.9% gain is certainly a healthy number.
Looked at different way, the two-year sum of RevPAR growth for the first five months of this year have been healthy or very healthy, and May is no exception.
But that said, RevPAR growth is decelerating. Looking at numbers this year so far.
So just as it is with any data point, there are two ways to interpret this:
- 2015 will be a slow, gradual “soft landing” for RevPAR growth.
- Never mind, May is a hiccup. Full steam ahead!
RevPAR growth in 2014 between June and December was more than 7% (except November) and more than 9% for four of those months, so it will be interesting to see if we can maintain the 7.2% pace that we have reported year-to-date. Our full-year 2015 forecast stands at 6.6%, so a slight bit of slowing is expected.
3. Second month to hit 5% ADR growth
Average daily rate drove RevPAR again. May was the second month this year the U.S. hotel industry hit 5% growth.
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