US records highest ADR, RevPAR ever in 2023

CoStar released new data on full-year 2023 U.S. hotel performance and pipeline status that revealed record results for ADR and RevPAR and a December increase in planning stage activity for development.

The U.S. hotel industry posted its highest ADR and RevPAR on record in 2023 with occupancy hitting 63%, up 0.6% versus 2022; ADR up 4.3% over 2022 at $155.62; and RevPAR jumping 4.9% versus last year at $97.97. The country’s occupancy level was its highest since 2019.

Among the Top 25 Markets, New York City experienced the highest levels in each of the three key performance metrics: occupancy (+8.8% to 81.6%), ADR (+8.5% to $301.22) and RevPAR (+18.1% to $245.77).

New Orleans (-6.8% to $100.40) and Miami (-6.7% to $159.22) reported the only RevPAR decreases in 2023.

The Top 25 Markets showed higher occupancy and ADR than all other markets.

Pipeline reflects renewed confidence

Activity in the planning phases of the U.S. hotel pipeline remained up in December, while rooms in construction decreased after two months of gains, according to CoStar data.

The December 2023 U.S. hotel pipeline in construction hit 152,114 rooms (-4.5% YOY); final planning was at 255,039 rooms (+19.7% YOY); and planning reached 318,597 rooms (+32.7% YOY).

“The number of rooms in construction fell in December following a nearly 7% increase in October that held steady through November,” said Isaac Collazo, STR’s vice president, analytics. “For most of 2023, rooms in construction trailed 2022, but the increases in both the final planning and planning stages point to confidence in travel for the foreseeable future. Historically, the final phase of the pipeline has declined month over month in December.”

Upper midscale and upscale projects continue to dominate the pipeline, accounting for more than half of the in-construction room count.

Broken out by chain scale segments (% of existing supply, in-construction room count):