Booked and Busy Hotels
While seasonal patterns helped lift the overall hotel industry across regions, it should be noted that performance exceeded pre-pandemic levels. Domestically, hotel demand rose amidst the busy summer travel season (4% MoM/ 1% YoY/ 1% YoY4). Moreover, European counterparts, who represent a similar market share of a third, fared even better (3% MoM/ 6% YoY/ 7% YoY4). Despite Europe’s uncertain economic picture, it continues to lead as a global tourist hotspot, boasting over half of the top ten most visited international tourist destinations worldwide.
In response to such strong demand, nationwide average daily rates experienced robust increases (2% MoM/ 3% YoY/ 17% YoY4). In Europe, average daily rates were even higher across all horizons (12% MoM/ 16% YoY/ 45% YoY4). As such, hotel room revenues soared and posted healthy results. U.S. hotel revenues were bolstered by solid occupancy, and guests accepted pricier options (6% MoM/ 3% YoY/ 18% YoY4). Note that ADRs contribute to the shelter portion of inflation, as measured by CPI, under lodging away from home. Nevertheless, lofty ADRs aid hotels to offset wage pressures from the tight labor market and improve profit margins.
European hotel revenues also climbed similarly (15% MoM/ 22% YoY/ 57% YoY4). In reference to other international performance, Asia Pacific’s lifted travel restrictions continued to benefit the region, especially China. In totality, there is a sustained improvement in group and business travel, and while it has yet to fully recover, it may prove a tailwind once summer leisure travel cools.
1YoY4?= comparison with June 2019