The largest U.S. hotel companies’ luxury brands are lagging behind their lower-end siblings this year when it comes to room-demand growth, lending credence to the theory that the U.S. lodging market might be nearing the end of its positive-demand cycle.

Marriott International, Starwood Hotels & Resorts and Hyatt Hotels all reported second-quarter results that suggested top-end demand growth had slowed or stopped altogether. Marriott’s Ritz-Carlton had a North American RevPAR growth rate of 1%, trailing Marriott’s overall 3.2% RevPAR growth for the region. Starwood’s St. Regis/Luxury Collection RevPAR fell 0.5% from a year earlier, and both Park Hyatt and Grand Hyatt had 2% RevPAR declines, compared with 2.3% companywide RevPAR growth.

Nonetheless, there were exceptions to the trend. InterContinental Hotel Group’s InterContinental brand kept pace with the company’s 3% RevPAR growth rate in the U.S. The biggest exception appeared to be Hilton Worldwide’s Waldorf Astoria group, whose 4.7% RevPAR growth outpaced the rest of the company’s 2.9% growth.

The slower growth rates stem from a combination of what hotel operators described as weakness in corporate-transient business and the challenges of improving in a sector where occupancy rates had already been approaching 80%.

“Corporate investment has been soft and some cutbacks in travel, both individual business and small corporate groups, have occurred as a result,” said Mark Woodworth, senior managing director at CBRE Hotels.

Jan Freitag, senior vice president of hotel research firm STR, said, “You’re seeing a slowdown for sure.”

The luxury sector includes some of the country’s highest-profile hotels but accounts for just 5% of the approximately 5 million rooms nationwide.

In the luxury sector, the average room rates are about $280 a night, which is more than double the national average of about $125 a night, according to STR.

Whether the slowdown portends the end of the positive-demand cycle in recent years remains in question, as the top end of the market showed the fastest improvement when the lodging sector dug itself out of the Great Recession.

Between 2009 and 2012, the luxury sector saw a 29% RevPAR jump, compared with 22% for the entire industry, STR reported.

The slowdown could also point to the broader issues of continued corporate-transient weakness and an uptick in new room supply. While transient-leisure occupancy for the next year is up 6.7% from a year ago, transient-business occupancy has fallen 4%, TravelClick said.

Additionally, the number of U.S. hotel projects under construction at the end of June jumped 21% from a year earlier, to almost 1,400 hotels, research firm Lodging Econometrics said last month.

While Freitag said much of that supply will come in the select-service sector, a number of luxury brands have recently either started construction or announced projects throughout the U.S., including Waldorf Astoria hotels in Beverly Hills, Calif., and San Francisco; an InterContinental property in Los Angeles; and a Ritz-Carlton near Phoenix.

Meanwhile, AccorHotels completed its acquisition of FRHI Hotels & Resorts in July, giving the Paris-based hotelier 20 Fairmont luxury hotels in the U.S.

“Our hotels are performing well,” Diana Banks, vice president of Raffles brand and luxury sales at FRHI Hotels & Resorts, said while attending the Virtuoso Travel Week conference in Las Vegas last month. “We’re not seeing huge growth, but we’re not seeing a reduction.”

And as far as agents are concerned, the leisure sector will continue to spur luxury hotel demand, even as corporate demand might lag.

“We are absolutely not seeing [a slowdown],” David Kolner, Virtuoso’s senior vice president of global member partnerships, said at the conference. “We’ve had actually double-digit growth in our hotels portfolio of our preferred hotels, and so we’re really proud of that.”
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Jamie Biesiada contributed to this report.

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