Last updated: 07:00 PM ET, Tue August 30 2016

New Hotel Bookings Heading for Prolonged Decline in Top North American Markets

Hotel & Resort | Patrick Clarke | August 30, 2016

New Hotel Bookings Heading for Prolonged Decline in Top North American Markets

Photo courtesy of Thinkstock.  

As summer winds down, new hotel bookings are declining despite promising projections for committed occupancy or capacity and average daily rates (ADR), based on the latest data from cloud-based solutions provider TravelClick's August 2016 North American Hospitality Review (NAHR).

This month's report analyzes group sales commitments and individual reservations in North America's 25 major markets for hotel stays booked by Aug. 1, from the period of August 2016 to July 2017.

While this month's NAHR shows that new August reservation commitments fell 2.8 percent, it also points to signs of growth for committed occupancy and ADR during the fourth quarter of 2016.

"We're beginning to see an emerging trend with prolonged weakness in new reservation commitments," TravelClick's senior industry analyst John Hach said in a statement. "The current slowdown began in June 2016 and is continuing well into August."

"While overall year-over-year variances remain positive, there is notable deceleration within the group and weekday transient negotiated segments that carry the risk of lower revenue per available room (RevPAR) performance in the third quarter of 2016," added Hack.

Looking Ahead

According to TravelClick's August 2016 NAHR, transient bookings through July 2017 are up 3.5 percent year-over-year, while ADR for transient bookings segment is up just 1.7 percent. 

READ MORE: Where Are Travelers Booking Online?

Meanwhile, the transient leisure segment is showing occupancy gains of more than 5 percent and a 2 percent rise in ADR.  The transient business segment is down 0.6 percent over the next 12 months despite ADR being up 2 percent. 

Finally, group bookings are up 5.2 percent in committed room nights over the same time last year, while ADR is up more than 3 percent. 

"Given the current environment in the third quarter of 2016, hoteliers must take proactive measures to promote their businesses and creatively differentiate their properties – all the while resisting the temptation to immediately lower rates," said Hach. 

"There is still viable transient leisure demand occurring, and hoteliers must find ways to successfully compete in the market, especially through the upcoming months into the fourth quarter of 2016."

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