Last updated: 01:00 PM ET, Wed September 30 2015

North American Hotels Experiencing Heavy Business

Hotel & Resort | Ryan Rudnansky | September 30, 2015

North American Hotels Experiencing Heavy Business

Despite recent volatility in the stock market, the coming months appear to be promising for North American hotels.

According to data from the September 2015 TravelClick North American Hospitality Review (NAHR), major North American markets are experiencing high numbers of advance bookings, in addition to some notable numbers in the third quarter of 2015.

In the third quarter of this year, average daily rate (ADR) and revenue per available room (RevPAR) across all travel segments jumped 3.2 percent and 3.9 percent, respectively, compared to the third quarter of 2014. 

Based on reservations already on the books in 25 major North American markets, ADR and committed occupancy (transient rooms reserved + group rooms committed/ capacity) in the fourth quarter (across all travel segments) are currently up 3 percent and 6 percent, respectively. That includes a 4.6 percent jump in transient business (individual business) bookings, year-on-year, and a 6.8 percent spike in group committed occupancy.

What’s more, committed occupancy, group business bookings and transient bookings added over the last month are up 3.4 percent, 6.6 percent and 2.8 percent, respectively, compared to last year.

“The latest advance reservation trends are impressive, especially since there has been concern that the recent global stock market volatility may have an adverse impact on demand,” said John Hach, senior industry analyst at TravelClick, via a release. “What is particularly noteworthy is the new demand that’s been generated throughout both group and transient consumers. This bodes well for solidifying occupancy and improving revenue per available room (RevPAR) throughout the upcoming months and into 2016.”

For the next 12 months (September 2015 through August 2016), overall committed occupancy and ADR are currently up 3.9 percent and 2.6 percent, respectively, compared to the same period last year.

Transient business is particularly high for North American hotels in the next year. Transient bookings (individual leisure and individual business) are up 4.5 percent for the period, while ADR for the segment is up 2.9 percent. Transient leisure (discount, qualified and wholesale) occupancy and ADR are up 9.7 percent and 1.8 percent, respectively.

The transient business (negotiated and retail) segment is down 2.4 percent, but ADR is up 5.0 percent. Group segment occupancy is up 3.6 percent, and ADR has increased 1.9 percent, compared to the same time last year.

“As hotels gear up for the winter/holiday season, the state of the industry looks positive from both a business and leisure perspective,” Hach said. “There is a significant uptick in occupancy, particularly in the group sector and with leisure travelers. As a result, no matter what a hotel caters to — business or leisure — there are opportunities for hoteliers to increase revenue and end the year strong.”

The September NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by Sept. 1, 2015, from the period of July 2015 to August 2016.

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