Puerto Rico tourism reports record lodging revenue, market shifts
The island’s destination marketing organization monitors Puerto Rico tourism’s brand health through three key performance indicators: familiarity, perception and likelihood to visit.
Lodging demand in Puerto Rico through November increased by 7% to 6.7 million room nights compared with the same period last year, Discover Puerto Rico reported, citing year-to-date estimates from Smith Travel Research (STR) and AirDNA.
November lodging demand followed unusual trends, partly due to slow demand at the beginning of the month caused by the elections and a late Thanksgiving holiday, according to Discover Puerto Rico, the island’s destination marketing organization (DMO).
Demand for rental accommodations grew 18% year over year, while hotel room demand remained flat at -0.3%. Rental demand estimates for the month point to more than 229,000 booked room nights, 17% higher than a year ago, accounting for 45% of the total demand market share.
Year-to-date lodging revenue estimates through November reached $1.7 billion, an 8% increase from last year and 104% more than in 2019. Hotels recorded an average daily rate (ADR) of $280 in November, up 7% from last year.
Rental booked nights pacing ahead of last year
The updated national hotel forecast released in August by Tourism Economics and STR anticipates that hotel demand in the U.S. will experience less than 1% growth in 2024 before gaining momentum in 2025.
Growth in the group segment and international arrivals is expected to help offset softness in domestic travel. Softening demand is particularly noticeable among lower-price hotels, where economic headwinds are affecting some household budgets, according to Discover Puerto Rico’s report.
The modest growth in hotel demand is projected to match the growth in the hotel supply, keeping the annual occupancy rate unchanged from 2023 to 2024 at 63%. Room revenue is forecast to grow 2.7% in 2024, mostly due to a 2% growth in ADR.
Locally, hotels have maintained rate strategies similar to last year, with a year-to-date growth of 1% at $291, peaking at $381 in March 2024, Discover Puerto Rico reported.
Independently managed rental properties have increased in supply, driving up competition in the sector and causing ADR to drop 5% since last year to $229, with little seasonal change.
Unlike the rental market, hotels have managed revenue yields in proportion to seasonal demand, according to the report. While rental properties show a $15 spread between their highest and lowest ADR months, hotels have created a $170 spread between March, which was the peak of the season, and September of this year. Because of this strategy, hotels account for two-thirds of total lodging revenue, despite increases in market share by the rental segment.
The DMO regularly conducts Puerto Rico tourism’s brand health measurements by monitoring three key performance indicators: familiarity, perception and likelihood to visit.
As of this year, 48% of respondents have a positive perception of Puerto Rico; 25% are likely to visit in the next year — a 10-point increase since 2019; and 45% say they are familiar or very familiar with Puerto Rico, Discover Puerto Rico reported.
