Performance during the week before the Memorial Day holiday (22-28 May 2022) came in lower than expected, as US hotel occupancy fell to more than 66% from 68% the prior week.

The decrease was the largest for the week ahead of the holiday since STR began publishing weekly data in 2000. Weekdays (Monday-Wednesday) accounted for roughly two-thirds of the weekly demand decline, with the weekend (Friday & Saturday) on par with the previous week.

We believe that the previous week’s demand was enhanced by university graduation ceremonies that were exaggerated by the inclusion of the 2020 and 2021 classes. Average daily rate (ADR) held steadfast, declining just 0.1% compared to the previous week, while revenue per available room (RevPAR) tumbled 3.0%.

While a letdown to previous pre-Memorial Day weeks, weekly occupancy has been above 66% six times so far this year, compared to seven times during the entirely of 2021. None of those weeks in 2021 happened before the Memorial Day holiday. As compared to previous pre-Memorial Day weeks, this week’s occupancy was in the lower half of all previous Memorial Day lead-in weeks, with the highest occupancy (71.3%) observed in 2015 and the second highest in 2019 (71%).

While this year’s level was unimpressive, actual room demand was the third highest of any pre-Memorial Day week (just below 2018) and 950,000 rooms less than 2019 – the year when the most rooms were sold on record for the aforementioned time period. Additionally, this week’s room demand was the eighth highest since the start of the pandemic and second best of the year.

There is also a supply component to the lower pre-holiday occupancy seen this year versus other periods. Supply was up 1.1 million room nights over 2019 and 1.8 million over 2018. Given the strong demand seen this year, occupancy would be more comparable to those two years if supply had remained constant.

Memorial Day weekend (Friday & Saturday) occupancy (78%) was in the middle of the pack compared to previous Memorial Day weekends, with the highest Memorial Day weekend occupancy (81.4%) observed in 2016. However, weekend occupancy has been above 77% for the past three weeks – the most since last summer. More importantly, this year’s room demand was the highest of any Memorial Day weekend, surpassing 2019 (which previously held the record), and the highest of 2022 thus far.

Top 25 Markets also saw a weekly occupancy decline, but occupancy has remained above 70% for the past three weeks. Similar to the overall U.S., weekday occupancy and room demand in the major markets fell, while weekend performance was virtually unchanged from the week prior.

Boston (80.2%) and Chicago (72.1%) reported their highest weekly occupancies of the pandemic-era.  Both markets also saw their highest weekday occupancy since the pandemic’s start.

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