What the data says 2023 will look like for hotels

Excluding the US, the week 6–12 January saw global hotel occupancy increase 10.2 percentage points year-over-year (YoY) to 51.7%. This was 9.1 percentage points behind the comparable week in 2019. Nominal average daily rate (ADR) grew 30.7% YoY to $155, which was the second highest level for the pandemic years, following the last week of 2022.

Nominal revenue per available room (RevPAR) was up 62.7% YoY to $80, with ADR and RevPAR above the comparable week in 2019. For the US, hotel occupancy started 2023 at 47.2%. This is an increase of 1.8 percentage points from last year but down considerably from 2019. However, this is thought to be due to a holiday calendar shift as the comparable week of 2019 (6–12 January) was a complete non-holiday week versus this year when the US celebrated a public holiday. ADR increased 17.2% YoY to $143 and RevPAR was up 21.8% YoY to $67.

Improving on a global scale The top 10 largest countries, based on hotel rooms, saw occupancy increase by 8 percentage points YoY with most seeing growth above 10 percentage points. Japan had the highest occupancy of the week (62.3%) with Germany (39.3%) at the low end – although this is still a 14.5 percentage point improvement from last year, when the country was affected by the Omicron variant of Covid-19.

The Caribbean had the highest occupancy of any subcontinent (68.4%), only 3.4 percentage points behind 2019 levels. This boost was supported by leisure travel in destinations such as Barbados (86.6%), Aruba (78.3%) and the Cayman Islands (75.5%).

Western Europe saw the lowest occupancy at 44.6%, down 11.9 percentage points on the previous week.

In addition to Germany, Luxembourg and Monaco saw occupancy levels below 40% for the period. ADR in Western Europe fell 18.7% week over week, although this was expected due to New Year’s Eve being included in the data for the previous week.

The last of the effects of Covid-19?

The industry started the new year on the right footing with all performance measures growing versus a year ago, when countries struggled to contain Omicron. STR expects to see YoY growth in most regions, but particularly in Asia where pandemic restrictions continue to be relaxed. It’s predicted that once we get past Q1 2023, 2019 indices will take a backseat and YoY comparisons will finally become standardised for most countries.

Of course, much of the Western hemisphere remain on ‘recession watch’, anticipating that the severity and timelines will differ between country.