Demand growth for U.S. hotel room slowed last year, but
occupancy remained at a record level, according to data research firm STR.
Revenue per available room (RevPAR) grew 3.2% last year,
down from 6.3% growth in 2015. Occupancy rose 0.1 percentage point to 65.5%,
and the average daily rate was $124 a night.
Los Angeles, Norfolk/Virginia Beach and Nashville were the
three fastest-growing U.S. markets in terms of RevPAR, while Houston was hit
particularly hard last year.
The number of hotel rooms increased 1.6%, on top of 1.1% growth
in 2015. Notably, room supply rose by more than 5% in Houston and New York,
which had the two largest RevPAR declines in the country last year.
While New York’s occupancy rate remained the country’s
highest at 86%, RevPAR fell 1.1%.
Houston was hurt by challenges in the oil industry. The
city’s RevPAR plunged 13% from a year earlier, while occupancy fell 6.2 points,
Los Angeles’ RevPAR growth of 11% was the country’s highest
last year, while Norfolk/Virginia Beach and Nashville’s RevPAR advanced 8.2%
and 8%, respectively. Atlanta, Tampa/St. Petersburg and Dallas also all had RevPAR
growth of more than 5% in 2016.
STR senior vice president Jan Freitag, who spoke at the
Americas Lodging Investment Summit (ALIS) in Los Angeles this week, forecasted
RevPAR growth of 2.6% this year, with room rates continuing to rise and
occupancy remaining near its record level.