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U.S. EXTENDED-STAY hotels continued to perform well in November with recovery indices up compared to October and 2019, according to a report from The Highland Group. However, the market is showing signs of slowing. All extended-stay segments posted RevPAR gains in November compared to last year, the US Extended-Stay Hotels Bulletin: November 2022 report said. "Monthly gains in ADR and RevPAR have decelerated for most of the year and November increases were the lowest in 2022. Both economy and mid-price segments reported RevPAR increases well below the rate of inflation for the first time in November," the report said. "ADR growth is still high compared to long-term averages but with the economy segment reporting its eighth consecutive monthly decline in demand and mid-price extended-stay hotel demand also declining in November, rate resistance is building especially at lower price points."

THE BAIRD/STR Hotel Stock Index rose in March, continuing a trend from the previous month. Still, continued growth remains at risk by factors such as inflation and political unrest. The index increased 2.2 percent in March after rising 4.1 percent in February. It rose 2.4 percent year to date through the first three months of 2022. However, Baird/STR fell behind both the S&P 500, up 3.6 percent in March, and the MSCI US REIT Index, which rose 5.9 percent. The hotel brand sub-index rose 1.4 percent from February, while the Hotel REIT sub-index jumped 5.1 percent. "Hotel stocks increased in March but underperformed their benchmarks as stock market volatility eased and geopolitical concerns did not worsen," said Michael Bellisario, senior hotel research analyst and director at Baird. "Underlying hotel fundamentals continued to improve in March, and the outlook appears more favorable today than just one month ago despite all of the background noise in the stock market and with interest rates on the rise. Higher gas prices and heightened concerns about a slower growth backdrop have been topical with investors lately, but broader travel momentum and pent-up demand should keep the lodging recovery going over the near term, in our opinion."

THE RECOVERY MAY be under way, but most of the top U.S. markets, 21 out of 25, remain at a recession or depression level, according to a report from the American Hotel & Lodging Association. Urban markets are in worst shape, with most still in a "depression cycle." The overall U.S. hotel industry remains in a "recession," according to AHLA's report citing STR data. The difficulty for urban markets is that they depend substantially on business from events and group meetings. Room revenue was down 52 percent in May compared to May 2019. New York City, for example, is still in a depression with nearly 200 hotels in the city closed due to the pandemic, taking with them 42,030 rooms, one-third of the city's supplies. Leisure travel is currently driving the recovery, but business and group travel, the industry's largest source of revenue, will take longer to recover. Current forecasts show that segment returning to 2019 levels in 2023 or 2024. Several major events, conventions and business meetings have already been canceled or postponed until at least 2022.

HELPED BY THE onset of spring break travel, U.S. hotels' performance bettered in the second week of March from the previous week, according to STR's latest data through 11 March. The top 25 markets were up on a weekly basis but still behind 2019 levels. Occupancy for the week ending March 11 came in at 64.7 percent up from 62.8 percent the week before, 2.8 percent more than the comparable week in 2022 and 7.5 percent below the comparable week in 2019. ADR stood at $158.20, up from $151.35 the previous week and also up 8.1 percent and 16.6 percent over the same month in 2022 and 2019, respectively. RevPAR was reported at $102.38, up from $95.06 the previous week, and an increase of 11.1 percent and 7.8 percent over the same month in 2022 and 2019. Among the top 25 markets, Washington, D.C., witnessed the highest year-over-year occupancy increase compared to 2019, up 21.8 percent to 67.6 percent. However, none of the Top 25 Markets saw an occupancy lift over 2019. Meanwhile, D.C. also registered the most substantial ADR increase at $183.86 against 2019, up 23.4 percent. D.C.'s RevPAR rate also climbed up 50.2 percent to $124.33 year-over-year. Anaheim reported the highest ADR increase for spring break week, up 51.4 percent to US$245.62 and RevPAR rose 42.2 percent to $189.81, when measuring against 2019.

REVPAR FOR U.S. hotels recovered to 83.2 percent of 2019 levels in 2021, according to STR. Also, in December 2021, ADR and RevPAR hit all-time highs. U.S. hotel occupancy in 2021 was 57.6 percent, down 12.6 percent when compared to 2019. ADR for the year was $124.67, down just 4.8 percent from 2019. RevPAR at $71.87, down 16.8 percent when compared to two years ago. "In addition to 2020, U.S. hotel occupancy failed to reach 60 percent for just the second time since 2011," STR said. "On a nominal basis, 2021 ADR was the fourth highest on record. The country's RevPAR level was its second lowest in eight years behind only 2020." According to the report, none of the top 25 markets experienced an occupancy increase last year over 2019. Tampa reported the highest occupancy at 68.4 percent, down 5.2 percent from 2019. The largest ADR increase in 2021 was in Miami, up 14.7 percent to $223.49, compared to 2019. Norfolk/Virginia Beach registered the highest growth in RevPAR, up 7.7 percent to $72.31.

INFLUENCED BY EASTER and Passover calendar shift, U.S. hotel performance registered lower year-over-year comparisons from the previous week, according to STR's latest data through 8 April. Occupancy was 61.3 percent for the week ending April 8, down from 66.2 percent the week before, and dipped 7.4 percent than the comparable week in 2022. ADR stood at $153.30, down from $158.40 the week before, and rose 0.8 percent compared to 2022. RevPAR was $94, down from $104.78 in the last week and slipped 6.7 percent over the same month in 2022. Among the Top 25 Markets, New York City saw the highest year-over-year increases in occupancy, up 6.3 percent to 82.2 percent and RevPAR rose 19.4 percent to $232.80 over 2022.

DALLAS LEADS THE U.S. hotel construction pipeline for the fourth consecutive quarter, according to Lodging Econometrics. Among brands, Marriott International led the pipeline. Dallas had a record 173 projects with 20,707 rooms in the second quarter of this year, followed by Atlanta with 140 projects containing 18,131 rooms, Los Angeles with 124 projects with 20,365 rooms, New York, with 113 projects with 19,238 rooms and Phoenix with 108 projects containing 14,964 rooms, Marriott had 1,355 projects with 167,034 rooms, up 4 percent by projects year-over-year, tops the pipeline during the period. The Q2 2022 U.S. Construction Pipeline Trend Report said that major markets and popular tourist destinations in the U.S. reported highest occupancy rates since the pandemic began in early 2020 in the second quarter mainly due to robust leisure travel, group, and international travel. New York City with 78 projects with 13,063 rooms, Atlanta with 25 projects containing 3,905 rooms, Dallas with 25 projects with 3,725 rooms, Phoenix with 23 projects with 4,955 rooms and Los Angeles with 22 projects with 3,606 rooms are the top five markets with the most projects under construction during the end of June. They account for 22 percent of rooms under construction in the U.S.

U.S. HOTEL PERFORMANCE increased in the fourth week of February from the week before, according to STR. Occupancy, ADR and RevPAR also showed significant improvement when compared to same period in 2019. Occupancy was 62.2 percent for the week ending Feb. 26, up from 59.1 percent the week before and down 4.7 percent for the same period in 2019. ADR was $143.83 for the week, increased from $140.11 the week before and up 13.1 percent from two years ago. RevPAR was $89.45 for the week, up from $82.87 the week before and increased 7.7 percent from the same period two years ago. Among STR's top 25 markets, Orlando recorded the largest occupancy increase, up 6.7 percent to 85.9 percent, over 2019.

THE UPWARD MOVEMENT of ADR for U.S. hotels lifted the forecast for the market by STR and Tourism Economics. The travel research firms released the new forecast during the opening sessions of the Americas Lodging Investment Summit in Los Angeles on Monday. The recovery timeline laid out in the new forecast remains mostly the same as the previous forecast released in November, with ADR will near full recovery this year. RevPAR is anticipated to exceed 2019 levels in 2023, but when adjusted for inflation ADR and RevPAR are not projected to reach full recovery until after 2025. Occupancy is projected to surpass 2019 levels in 2023. "The industry recaptured 83 percent of pre-pandemic RevPAR levels in 2021, and momentum is expected to pick up after a slow start to this year," said Carter Wilson, STR's senior vice president of consulting. "With so much of that RevPAR recovery being led by leisure-driven ADR, however, it is important to keep an eye on the real versus the nominal. Terms of recovery are not playing out evenly across the board, and many hoteliers have had to raise rates to minimize the bottom-line hit from labor and supply shortages. We are anticipating inflation to remain higher throughout the first half of the year with a gradual leveling off during the third and fourth quarters. If that happens, and we avoid major setbacks with the pandemic, this year will certainly be one to watch with demand and occupancy also shaping up to hit significant levels during the second half."