Demand Dips for North American Hotels
The Year 2015 has been kind to many North American hoteliers, but new data from hospitality solutions provider TravelClick highlights some dips in guest demand for the rest of the year.
According to the August 2015 TravelClick North American Hospitality Review (NAHR), group occupancy and transient (individual) business occupancy have dipped by 0.5 percent and 1.4 percent, respectively, for the third quarter of 2015, compared to the same period last year, based on reservations currently on the books in the top 25 North American markets.
On top of that, transient business committed occupancy (transient rooms reserved + group rooms committed/capacity) is currently down 0.5 percent for the fourth quarter of 2015, compared to the same period last year.
John Hach, senior industry analyst at TravelClick, said the decline was in large part due to the fact that many travelers booked early this summer.
But Hach also noted that the strong U.S. dollar could be a factor, too.
“While there are many reasons that hotels are experiencing a relatively flat to slight dip in (third quarter) demand, it is likely just a small correction, as many travelers booked their trips earlier this summer,” Hach said, via a release. “However, the strong dollar cannot be ignored, as it is becoming more expensive for people who live in Europe and Asia to visit the U.S.”
In response, many North American hoteliers are looking ahead to early 2016, currently focusing on capturing advance bookings for next year instead of going after last-minute bookings this year.
“Savvy hoteliers and smart travelers are playing the long game, according to the latest TravelClick data,” Hach said. “While there are some short-term dips in demand, capturing strong advance bookings is a best practice for opportunistic hoteliers to increase RevPAR (revenue per available room) well into 2016. However, it will be interesting to see if and how the recent stock market volatility impacts short-term and advance bookings.”
For now, average daily rate (ADR) and RevPAR are relatively strong for the remainder of 2015. Across all travel segments, ADR and RevPAR are up 3.8 percent and 4.5 percent, respectively, for the third quarter, while ADR is up 2.9 percent for the fourth quarter.
The August NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by August 5, 2015, from the period of August 2015 to July 2016.
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