TravelClick: Hotel Reservations Slip but Room Rates Grow
New hotel bookings fell slightly in February, but average daily room rates should likely grow in both the first and second quarters, reported TravelClick, New York.
TravelClick predicts future average daily rates from its tracking of hotel reservations already on the books.
“Even though only 44 percent of North American markets are showing committed occupancy increases compared to a month ago, ADR is growing in 21 of the top 25 North American markets,” said TravelClick Senior Industry Analyst John Hach. He noted that both group and individual booking rates increased slightly compared to a year ago.
The lodging industry continues to respond to the growth in home rental sites such as Airbnb and Homeaway and online travel agent sites including Expedia, Orbitz and Priceline, said Kroll Bond Rating Agency Director Larry Kay. “Hotel consolidations have been occurring as chains look to increase scale, improve operating efficiencies and maintain a larger marketing budget for national campaigns,” he said. “With Marriott’s purchase of Starwood Hotels, Marriott stated that more rooms and resources would allow them to compete better.”
In its report, Hotels Are Not Taking Airbnb Lying Down, KBRA said hotel merger and acquisitions activity typically follows economic cycles. “The secular online threat of peer-to-peer accommodations [such as Airbnb] will persist,” KBRA said.
KBRA noted that Airbnb’s continued growth could make it harder for hotels to raise room rates. “This may be more pronounced in some of the major markets where Airbnb has a more significant presence, such as Los Angeles, Miami and San Francisco,” the report said.
STR, Hendersonville, Tenn., said the lodging sector reported “mixed” results in the three key performance metrics last week. In a year-over-year comparison with 2016, hotel occupancy fell 60 basis points to 70 percent, ADR rose 130 basis points to $129 and revenue per available room increased 70 basis points to $90.
San Diego experienced the largest year-over-year RevPAR increase among the 25 largest markets with a 26.3 percent increase to $166. Occupancy rose 4.9 percent to 90.1 percent. Detroit saw the only double-digit occupancy increase, up 12.8 percent to 71.1 percent, which gave the motor City the second-largest RevPAR jump, an 18.2 percent increase to $70.30.
STR reported that four top 25 markets reported double-digit RevPAR declines: San Francisco/San Mateo, Calif., Miami/Hialeah, Fla., Philadelphia/New Jersey and New York City.
