Hotel Rates Improve Despite Weakening Reservation Pace

Major-market hotels are experiencing improved average daily rate performance as they prepare for the holiday season, reported TravelClick, New York. But new bookings added over the last month fell.

TravelClick said ADRs increased in nearly 90 percent of the 25 largest North American markets even as new commitments added over the last month fell 3.5 percent.

“Over the past month, there has been a noticeable decline in new reservation pace,” said TravelClick Senior Industry Analyst John Hach. He named several potential reasons for the decline, including concern over a global economic slowdown, financial market turbulence and the seasonal slowdown of advance bookings that often occurs before the year-end holidays. “However, the weakening pace has not kept hoteliers from increasing ADR,” he noted.

STR, Hendersonville, Tenn., reported that the hotel sector also recorded positive occupancy and revenue per available room growth in late October. In year-over-year measurements, hotel occupancy increased 1.2 percent to 62.3 percent and RevPar increased 6.4 percent to finish the month at $75 on average.

San Francisco/San Mateo, Calif. reported the largest ADR increases among the top 25 markets, up 32 percent to $281. That market’s RevPAR jumped 35.1 percent to $232 and occupancy increased 2.4 percent to 82.7 percent, STR said. Five other markets saw 15-plus percent RevPAR increases: Boston; Tampa/St. Petersburg, Fla.; Anaheim/Santa Ana, Calif.; Atlanta and Minneapolis/St. Paul.

Overall, 16 of the top 25 markets experienced double-digit RevPAR increases, STR reported.

“As hoteliers prepare for the upcoming holiday season, it’s important to note that the industry occupancy outlook for group reservations remains strong throughout the upcoming months,” Hach said. “Heading into 2016, there is also a significant uptick in reservations for individual leisure travelers. These results indicate that there is a solid base of advance bookings for group and transient business during the upcoming months.”

Hach said hoteliers should plan ways to capture share in higher profitability channels, such as the Global Distribution System–a network that can link rates and bookings across travel sectors such as airline reservations, hotel reservations and car rentals–and their own websites. “Doing so helps to safeguard RevPAR performance should the current advance reservation pace continue [to slow],” he said.