Last updated: 07:00 PM ET, Thu January 28 2016

Group Business Bookings Propel North American Hotel Growth

Hotel & Resort | Patrick Clarke | January 28, 2016

Group Business Bookings Propel North American Hotel Growth

Photo courtesy of Thinkstock

North American hoteliers are off to a strong start in 2016, based on recent data uncovered in cloud-based solutions provider TravelClick's January 2016 North American Hospitality Review.

Currently, 19 of the top 25 markets are showing committed occupancy growth compared to December 2015. This growth has been spurred by an increase in group business bookings.

Nonetheless hoteliers are becoming more dependent on leisure and wholesale bookings because of a dropoff in business travel bookings, relying on lower average daily rates (ADR) to drive occupancy. 

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"While total committed occupancy for 2016 is off to a strong start, led with a significant increase in new group bookings added within the past 30 days, business demand pace has slowed, creating greater dependency on hoteliers to offset the slowing pace with discounted leisure and promotional bookings," said TravelClick's senior industry analyst John Hach in a statement. 

Looking ahead to the next 12 months, TravelClick's January review reveals a two percent rise in transient (business and leisure) bookings year-over-year and a 3.6 percent jump in ADR for the transient segment.

While the transient leisure segment is showing occupancy gains of 6.1 percent and ADR gains of 3.2 percent, the transient business segment is down 3.6 percent in occupancy. Meanwhile, ADR for this segment is up 5.2 percent year-over-year. 

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For group bookings, committed room nights are up 3.5 percent from the same time last year, with ADR up 4.7 percent.

"The good news is that the dispersion of the newly added group bookings will continue throughout the New Year, providing a viable foundation of advance reservation business," said Hach, adding that it "bodes well for hoteliers to continue their focus on increasing ADR in 2016."

Last month's North American Hospitality Review found that 21 of the top 25 hotel markets were experiencing an increase in bookings, with increasing ADR driving much of that growth.

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