Average daily rate at U.S. hotels for the month of July jumped by 3.6 percent year-over-year, according to lodging data provider STR, which ties February and June for the biggest year-over-year monthly rate increases of 2016. The growth comes in spite of a 1 percent year-over-year drop in occupancy, down to 74.4 percent, which represents the steepest such decline this year.
"July supply growth crept up 1.6 percent," noted Jan Freitag, STR's senior vice president for lodging insights, "and demand growth slowed to an anemic 0.6 percent -- basically no growth at all. Math then dictates that occupancy has to decline by 1 percent, but luckily, there was a bit of pricing power."
That said, July demand still was the highest in absolute terms for any month on record, as more than 117 million room nights were sold. And revenue per available room, which grew by 2.5 percent for the month, has now increased year-over-year for 77 straight months.
Thanks to hosting the Democratic National Convention, the Philadelphia area reported the largest year-over-year growth among the top 25 markets. Philly occupancy was up by 6.2 percent, to 78.6 percent, while average daily rate skyrocketed by 30.5 percent, to $158.53, and RevPAR shot up by 38.6 percent.
Houston saw the steepest drops. Occupancy fell by 12.8 percent, to 61.2 percent; ADR was down 8.8 percent, to $95.71; and RevPAR plummeted by 20.5 percent. Rates in Houston have been distressed, driven by the weak oil market and a robust increase in room supply.
No other markets reported double-digit increases or decreases.