The hotel business has been a bit sluggish lately throughout the upper Midwest. But three states – Minnesota, Nebraska and Wisconsin – bucked the trend, all seeing solid occupancy gains during the year ending in the second quarter of 2018, according to the latest research from Marcus & Millichap.
In its Upper Midwest hospitality research report, Marcus & Millichap said that those three states not only saw boosts in occupancy rates but also in revenue per available room, better known in the hospitality industry as RevPAR, during the last four quarters.
What’s behind the increase? Earlier this year, Minneapolis did host the Super Bowl, which generated a significant increase in the performance of its hotels. Minnesota led the region’s occupancy gains during the last four quarters, with this rate climbing 80 basis points in the state to 62.5 percent.
In Nebraska, tourists flocked to the state to watch the solar eclipse in August of last year. According to Marcus & Millichap, occupancy rates climbed 200 basis points during that month in Nebraska compared with the same month in 2016.
Overall, the annual hotel occupancy rate in the upper Midwest region fell 20 basis points during the year ending in the second quarter of 2018. That bit of a dip brought this rate down to 59.8 percent during this time.
The biggest decline among states during the year ending in June took place in North Dakota. Annual occupancy here fell 260 basis points to 49.1 percent. Iowa came next, with the annual occupancy rate here falling 170 basis points to 55.2 percent during the same period.
The fall in occupancy also slowed RevPAR growth during the year that ended in June. Marcus & Millichap reported that the average daily room rate rose a small 1 percent to $110.09. The previous year, though, the average daily room rate increased by 2.1 percent.
RevPAR, then, did increase, but only but a bit, inching up 0.6 percent during the past 12 months to $67.47 throughout the upper Midwest region.
Minnesota saw the strongest growth in revenue metrics during this period. The average daily room rate climbed 2.9 percent to $114.4 while RevPAR increased 3.5 percent to $71.70. In Minneapolis itself, the average daily room rate rose 3.3 percent while RevPAR increased 3.1 percent.
In Wisconsin, the average daily rate rose 1.1 percent to $104.72 during the past 12 months, according to Marcus & Millichap. This helped lift RevPAR 1.4 percent to $60.79.
