Looking for a good hotel deal this summer? Try these big cities

Bailey Schulz, USA TODAY
·5 min read

Can't find an affordable beach hotel this summer? Your next best bet might be staying in an urban market.

Twenty-one of the 25 top U.S. hotel markets are still in a depression or recession, with revenue per available room – or revpar – far below pre-pandemic peaks, according to a new report from the American Hotel & Lodging Association based on May data.

While leisure travel has been rallying in recent months, the majority of the top U.S. hotel markets are in urban areas and face a slower rate of recovery as they wait for business and group meeting travel to pick up.

For travelers, those lower occupancy levels typically mean marked-down room rates.

"You can find some resorts where pricing is fully back to 2019 levels or maybe even beyond, but in general, rates always chase occupancy," AHLA president and CEO Chip Rogers told USA TODAY. "In many of your large city, urban markets ... you're going to find some really good deals."

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Urban hotel markets are still recovering, which could mean cheaper rates

Seven of the top U.S. hotel markets – including San Francisco, New York City and Washington, D.C. – are considered to still be in a depression, with May revpar down more than 50% compared to May 2019, according to AHLA. Fourteen others remain in a recession, with revpar down 20% to 50%.

“It’s a sober reminder that the industry is still in the infancy stage of any type of recovery,” Rogers said.

Resort markets and small metropolitan markets are stabilizing, but urban markets saw May revpar cut in half between 2019 and 2021. The lack of travel to these areas means prices are still below pre-pandemic peaks, Rogers said.

Data from hospitality data-tracking firm STR shows average daily room rates in the U.S. hit $128.90 the week of June 13, down 4.4% compared to the same week in 2019. Rogers said urban market hotel rates will likely remain below 2019 rates through late 2023.

Beach markets, however, are a different story.

Those destinations have been successful at attracting travelers during the busy summer travel months. Miami’s revpar grew 31% in May compared to May 2019, according to AHLA, and STR data shows the city's daily room rates jumped 45% compared to 2019 numbers the week of June 13 to $221.42.

Even though some markets are finding success in the summer travel months, the U.S. hotel market as a whole remains in a recession, according to AHLA. Rogers said leisure travel only accounts for about 40% of the industry’s annual revenue, with the rest coming from areas like business travel, meetings, conferences and conventions.

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When do urban hotel markets offer the best deals?

Hotels in urban markets like New York City typically charge the highest rates on Monday and Tuesday to match business travel demand, but Rogers said their pricing strategy has shifted.

“Demand is more on the weekends now,” he said. “You see hotels recognizing what consumers are out there, and right now it’s the leisure travel consumer.”

Rogers doesn't expect business travel to return to pre-pandemic levels until 2023, and said recovery efforts could be hindered by the U.S. workforce’s shift toward remote work.

“Places like New York and Washington, D.C., and in Boston, these downtown urban city centers … if people are still working remotely through the fall and into the end of the year, then business travel is going to struggle,” Rogers said.

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How much are hotel rooms in the top U.S. hotel markets making?

The top U.S. hotel markets are seeing lower revenues per available room in 2021, which can mean room rates are lower. Here's how revpar changed for the top U.S. hotel markets between May 2019 and May 2021, according to AHLA:

  • San Francisco: -70%, from $203 to $62

  • Boston: -67%, from $184 to $61

  • Washington, D.C.: -65%, from $145 to $51

  • New York City: -62%, from $249 to $95

  • Chicago: -59%, from $126 to $52

  • Seattle: -56%, from $122 to $54

  • Minneapolis: -51%, from $81 to $40

  • Philadelphia: -46%, from $117 to $64

  • New Orleans: -41%, from $115 to $68

  • Oahu Island, Hawaii: -38%, from $185 to $114

  • Denver: -38%, from $102 to $63

  • Nashville: -37%, from $123 to $77

  • Orange County, California: -33%, from $117 to $79

  • Detroit: -31%, from $71 to $49

  • Orlando, Florida: -30%, from $91 to $64

  • Los Angeles: -27%, from $137 to $100

  • Saint Louis, Missouri: -27%, from $77 to $57

  • Houston: -25%, from $72 to $54

  • Dallas: -23%, from $77 to $59

  • Atlanta: -23%, from $79 to $60

  • San Diego: -23%, from $122 to $94

  • Phoenix: -6%, from $83 to $78

  • Norfolk/Virginia Beach, Virginia: +1%, from $76 to $77

  • Tampa, Florida: +10%, from $95 to $104

  • Miami: +31%, from $136 to $178

  • U.S.: -22%, from $91 to $69

This article originally appeared on USA TODAY: Hotel rooms in urban markets have cheaper room rates, revenues