Firmly in recovery mode. That’s how Cushman & Wakefield described the U.S. lodging industry at the start of 2023.
And why not? According to Cushman & Wakefield’s March 8 U.S. Lodging Industry Overview, U.S. hotel revenues were 44% higher in 2022 than they were during the previous year. This is largely due to the return of leisure travelers, many of whom no longer consider COVID to be as serious of a concern.
According to Cushman’s report, overall demand for hotel rooms was up 11% in 2022 while the average daily room rate increased 19% by the end of the year.
What’s especially impressive is how much travelers paid on average for hotel rooms last year. Cushman reported that the average daily room rate increased to $148.83 in 2022. That’s up from an average daily rate of $124.96 a year earlier.
Another key figure of a hotel’s success is RevPAR, revenue generated per available room. According to Cushman’s research, RevPAR jumped to an average of $93.28 for U.S. hotels last year, an impressive jump from the average of $71.89 a year earlier.
This doesn’t mean that the hotel industry doesn’t face challenges. As Cushman says, occupancy rates are still below their peaks of 2018. In 2022, the U.S. lodging industry saw an occupancy rate of 62.7%, an improvement but still lower than the 66% of 2018. The industry is still waiting on a stronger return of business travel, too, something that has not yet happened.
What about in the Midwest? Which local markets saw big jumps in RevPAR last year?
Minneapolis’ lodging industry has performed well. In 2021, this market’s RevPAR came in at $44.76. Last year, though, it rose to $68.16. In Chicago, RevPAR rose from $60.40 in 2021 to a significantly higher $96.56 last year.
St. Louis saw a solid RevPAR gain last year, too, increasing from $52.44 in 2021 to $69.28 last year. In Nashville, RevPAR jumped from $80.75 in 2021 to $115.06 last year.
Several Texas cities did well when it came to RevPAR, too. Cushman reported that in Houston, RevPAR jumped from $49.81 in 2021 to $59.33 last year, while in Dallas this figure increased from $55.91 two years ago to $75.34 last year. In San Antonio, RevPAR increased from $65.13 in 2021 to $80.21 last year.
