Last updated: 05:00 PM ET, Mon May 12 2014

TravelClick: ADR Seen As Primary Driver of Hotel Growth

Hotel & Resort Claudette Covey March 07, 2013

Demand for hotel rooms continues to see moderate growth across all segments but average daily rate (ADR) continues to be the main driver of growth for hotels in 2013, according to data from the February 2013 TravelClick North American Hospitality Review.

“Based on TravelClick data, while committed occupancy is showing a steady increase as 2013 goes on, ADR remains the main source of growth for hotels,” said Tim Hart, executive vice president, enterprise research and development, TravelClick. “We expect to see this trend continue as we get further into the year.”

Committed occupancy across all segments, for February 2013 through January 2014, is up 2.1 percent compared to a year ago. Based on reservations currently on the books, ADR is up 3.4 percent, compared to the same time last year. RevPAR is up 5.5 percent.

The transient segment – comprised of individual business and leisure travelers – continues to be responsible for the majority of hotel sector growth, up 2.8 percent overall. Business demand, which includes weekday transient negotiated and transient retail segments, is up 3.1 percent while leisure demand. Group segment ADR is up 0.5 percent compared to last year. Transient ADR is up 4.9 percent with business and leisure rates up 4.6 and 5.4 percent respectively.

In January, occupancy was up 2.1 percent. For February and March, committed occupancy segments is up 1.8 percent year-over-year, based on current reservations on the books. For February and March, group committed occupancy is down -1.0 percent. However, transient demand for these months is looking strong, up 4.6 percent over the same time last year.  Breaking transient down further into business and leisure, leisure demand is up 5.1 percent in February and March and business demand is also up 4.0 percent.

ADR was up 3.1 percent for February and March over the same time last year. The increase was driven by the transient segment, which was up 5 percent. Business and leisure rates are up 4.9 and 5.6 percent, respectively. Group segment ADR is flat, down 0.1 percent.