Last updated: 10:34 AM ET, Thu May 28 2015

Outlook Bright for North American Hotels This Summer and Beyond

Hotel & Resort | Ryan Rudnansky | May 21, 2015

Outlook Bright for North American Hotels This Summer and Beyond

As generally expected, 2015 is shaping up to be a strong year for North American hoteliers, including during the spring and summer seasons.

Across the top 25 North American markets, average daily rate (ADR), occupancy and revenue per available room (RevPAR) increased in the second quarter of 2015, compared to the second quarter of 2014, according to data from the May 2015 TravelClick North American Hospitality Review (NAHR).

Including all travel segments (transient leisure, transient business and group), ADR shot up 4.2 percent in the second quarter, while occupancy and RevPAR increased by 1.8 percent and 6.1 percent, respectively.

What’s more, committed occupancy (transient rooms already reserved + group rooms committed) across all travel segments is up 1.7 percent for the third quarter, year-on-year. ADR is currently up 5.3 percent for the quarter.

“There is a bright outlook for the coming summer travel season as we’re seeing strong year-over-year increases in the group, business and transient segments,” said John Hach, senior industry analyst at TravelClick, via a release. “To prepare for summer, hoteliers should consistently monitor their local competitive set not only focusing on rates but what other amenities are being included to best capitalize on seasonal demand.”

In fact, things look bright for hoteliers over the next 12 months, according to the NAHR report.

For the next 12 months (May 2015-April 2016), overall committed occupancy is up 2.8 percent in the top 25 North American markets, while ADR is up 4.7 percent, year-over-year (based on reservations currently on the books). Transient leisure and business bookings combined are up 3.9 percent, while ADR is up 5.1 percent.

“We are seeing that consumers are looking for a combination of price and value when selecting hotel rooms,” Hach said. “Inclusions such as free Wi-Fi and meals are now often taken into the total cost consideration when making hotel decisions, especially on family vacations where budgets may be tight and hotels need to make sure they are catering to travelers’ demands in order to maximize bookings.”

The transient business segment in particular is rewarding hoteliers for their hard work. ADR and RevPAR for the segment shot up 5.9 percent and 6.9 percent in the second quarter, respectively. For the third quarter of 2015, ADR and committed occupancy for the segment are up 8.4 percent and 6.5 percent, respectively. The transient business segment also boasts the greatest increase in ADR over the next 12 months among all other segments (6.7 percent).



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