Revenue per available room (“RevPAR”) reached the highest fourth quarter average since 2006, as growth in average daily room rate (“ADR”) rebounded at Manhattan hotels. During the quarter, lodging supply, which continued to outpace growth in demand, resulted in declines in occupancy. With strong commercial traveler demand during the first half of the quarter, coupled with price-elastic holiday tourism in the latter half, Manhattan room rates finished the quarter at an average of $328 per night.
Representing a 2.8 percent increase from prior year levels, fourth quarter RevPAR was driven entirely by growth in ADR of 3.5 percent. Despite declines in occupancy during the second half of 2018, fourth quarter occupancy of 89.9% contributed to the highest annual occupancy rate for Manhattan hotels over the 24-year period tracked.
Across all Manhattan hotel classes, Upper Midscale properties exhibited the most robust growth in RevPAR for the quarter. Increasing 5.3 percent over Q4 2017 levels, growth in Upper Midscale RevPAR was largely driven by an increase in ADR of 4.6 percent. For Luxury and Upscale hotel properties, where occupancy fell to 84.8 percent and 92.1 percent respectively, fourth quarter RevPAR growth was lifted by increases in ADR of 5.1 percent and 3.8 percent, respectively. In Q4, Upper Upscale properties posted the lowest growth in RevPAR of all Manhattan hotel classes, with occupancy remaining flat and ADR growth averaging 1.3 percent over the prior year.
Source: PwC, based on STR data
PwC’s Manhattan lodging index provides updates on Manhattan’s lodging market, widely used by lodging brands, developers, and owners. The publication includes:
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