The Travel Forecast

October 26, 2023


Hotel Lodging Performance – September 2023

Occupancy, ADR, Supply & Demand

Hotel demand in Santa Cruz County increased +5.9% YOY easily absorbing the +4% YOY supply increase creating a +1.9% YOY gain in occupancy to 70.4%.

In contrast, ADR softened by -6.2% YOY to $205. Despite the increase in demand, the drop in ADR caused a -0.6% YOY decrease in revenue to $19M.1 for the month.

Travel prices in the US, as represented by the US Travel Price Index TPI) increased 4.4% in September relative to one year ago, a greater increase than overall prices (as represented by CPI) which grew 3.7% YOY. TPI increases were softened by declines in the pricing of Airline Fares (-13.4% YOY)

Other key metrics performed well in September with throughput at SJC up +3.1% YOY and Leisure & Hospitality jobs gaining +4.2% to 14.8K jobs, +0.7% more than in pre-pandemic September 2019.

Aggregated Lodging Summary

Short-term rentals saw a decrease in occupancy of -27.8%  compared to last year and a slight decrease in ADR of -1.4%  resulting in RevPAR decrease of -28.8% YOY.  Short-term rentals posted 46% of revenue in the month of September.

Employment Tracker

US September employment gains registered at +336K, with nearly 30% of the jobs added attributable to leisure and hospitality. This was the second-greatest monthly increase in employment for the year, behind only January. The unemployment rate remained stable at 3.8%.

In Santa Cruz County, Leisure and Hospitality Employment has made full recovery based on 2019 numbers.

Did you know?

Earlier this month, Governor Gavin Newsom signed Assembly Bill 258, which will create a state-administered small business portal. The portal would create a place for small business owners to search for opportunities such as technical assistance, grants, tax credits and incentives, and information on regulation compliance. It would also include a simple way for state agencies to find and partner with state-certified small businesses, with an emphasis on ones owned by veterans, women, and minorities.