Report: North American Hotel Industry Strong Overall
As hoteliers in North America look ahead, they should be relatively happy about the travel market, given data from the April 2015 TravelClick North American Hospitality Review (NAHR).
Based on forward-looking data from TravelClick, the combined ADR (average daily rate) across all travel segments (group and transient) in the top 25 North American markets is up 4.2 percent for the second quarter of this year (April through June), compared to the second quarter of 2014. Reserved occupancy (total number of rooms reserved/capacity) and RevPAR (revenue per available room) have also spiked, rising 0.8 percent and 5.6 percent, respectively.
“(The second quarter) shows signs of improvement from last month due to an increase in new group hotel booking pace coupled with continued resiliency in overall transient demand,” said John Hach, senior industry analyst at TravelClick, via a release.
In fact, the next 12 months (April 2015 to May 2016) look good for most segments. ADR across all segments is up 4.4 percent, year-over-year, based on reservations currently on the books. Committed occupancy (transient rooms reserved + group rooms committed/capacity) is up 2.1 percent. Group segment bookings, ADR and occupancy spiked considerably, up 13 percent, 4 percent and 2.5 percent, respectively. The transient leisure segment shows gains in ADR and occupancy of 2.8 percent and 2.6 percent, respectively.
That being said, there is room for improvement for one segment in particular: transient business.
The transient business segment did register increases in ADR and RevPAR of 6.5 percent and 6.2 percent, respectively, for the second quarter of 2015, but reserved occupancy was down 1.2 percent, year-over-year.
And while transient business ADR is up 6.9 percent for the next 12 months, occupancy is also down for this period (falling 0.6 percent, year-over-year).
Hach said to keep an eye on this segment.
“While 75 percent of the top North American travel markets are experiencing growth, hoteliers, need to monitor the pace of transient reservations, particularly business travelers as this segment has dipped slightly in recent months,” Hach said, via a release.
Hach added: “As hoteliers plan rate strategies for the peak travel period ahead, it is especially important that they capture transient demand early with advance booking incentives to stimulate early occupancy gains. To do so, they should be monitoring advance reservation pace with business intelligence.”
The April NAHR includes hotel stays booked by April 5, 2015.
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