CoStar data show hotel RevPAR up 10.4% as weekly ADR sets nominal record

The week of Sept. 13-19 gave U.S. hotels their fourth double-digit year-over-year revenue per available room gain of the year at 10.4%, with average daily rate up 5.7% to $179.30, which CoStar identifies as the highest nominal weekly ADR recorded in the U.S., according to data reported by Bisnow. CoStar concluded that Yom Kippur travel, which overlapped the week, was not the primary driver; luxury and upper-upscale group demand led with 2.5 million nights sold, and the improvement showed up almost everywhere, as 89% of U.S. hotel markets posted higher year-over-year RevPAR while 79% also recorded increases in both ADR and room demand.

A single strong week can be assembled from a handful of gateway markets; 89% of them cannot, which is why the breadth reading carries more weight than the 10.4% headline. The week also lands on a year already running ahead of plan: the first half booked a record number of rooms, and in August CoStar and Tourism Economics raised their full-year outlook, lifting projected RevPAR growth to 4.4% from 2.8% and ADR growth to 3.1% from 2%, with occupancy now projected at 63.1% against 62.8% previously.

The FIFA World Cup contributed as well, with CoStar measuring RevPAR increases of more than 40% around marquee matchups, though the tournament did not deliver what hoteliers hoped for, according to Bisnow; year-over-year performance improved anyway.

For lenders and buyers underwriting hotel assets, the composition of the gain matters as much as its size. Growth carried by rate leaves more of each incremental revenue dollar at the property than an occupancy-led gain of the same magnitude, since the room is sold either way, and that arithmetic is what makes the 79% ADR breadth reading more useful to a coverage test than the headline RevPAR number. A property whose revenue growth comes from rate rather than occupancy is also less exposed to a demand shock, which is the kind of cushion a lender prices. The caveat is that the record is nominal, and one week is a thin base for re-underwriting a full-year pro forma when the full-year forecast sits at 4.4%.

Amanda Hite, president of CoStar's STR hospitality benchmarking arm, expects year-over-year comparisons to slump next summer, when the calendar offers no comparable national event. The 40%-plus spikes around World Cup matches will be the hardest comps to clear, while the breadth of the September reading is the number that carries into 2027.