Last updated: 05:00 PM ET, Wed December 23 2015

Room Rates Spur North American Hotel Growth Heading into 2016

Hotel & Resort | Patrick Clarke | December 23, 2015

Room Rates Spur North American Hotel Growth Heading into 2016

Photo courtesy of Thinkstock

More than 80 percent of the top 25 North American markets are seeing a steady increase in hotel bookings heading into the new year, according to data from cloud-based solutions provider TravelClick, which released the findings of its December 2015 North American Hospitality Review Tuesday.

Data from the latest review reveals that 21 of the top 25 markets are showing committed occupancy growth within the past month. But at the same time, hotels continue to rely heavily on increasing average daily rates (ADR) in order to achieve growth in terms of revenue per available room (RevPAR).

Nonetheless, TravelClick's Senior Industry Analyst John Hach called the reservation growth to close out 2015 "welcomed news for hoteliers across North America."

"The overall reservation trend is positive, especially given recent headlines and concern over terrorism, showing that North America continues to be a strong market," he added. "As ADR continues to be the key driver of RevPAR growth, we foresee this trend continuing, making it increasingly important for hoteliers to leverage advance booking business intelligence solutions to actively manage unanticipated local market developments."

The December 2015 NAHR also examines the year ahead, revealing that transient bookings are up 1.2 percent year-over-year, and ADR is up 2.7 percent for the next 12 months.

Diving deeper, the transient leisure segment is showing a 4.6 percent gain in occupancy and a 2.8 percent gain in ADR. Meanwhile, the transient business segment is down 3.2 percent and showing a 3.5 percent gain in ADR. Despite both demand and rate being up 2.5 percent and four percent for the group segment, respectively, the data shows that the pace of bookings has fallen off. 

"2015 is ending on a resilient note, and this is carrying over into 2016; thus, there will continue to be viable opportunities for hoteliers to increase revenue and capitalize on the strength of the North American market," added Hach in a statement. "These areas of growth are becoming increasingly localized and necessitate closely monitoring key nearby hotels and emerging alternative lodging competitors."

TravelClick's December 2015 NAHR comes one month after its November review revealed that bookings made through digital and mobile channels are driving much of the success hotels are experiencing across the major markets heading into 2016.

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