Hotel Industry Enters 2012 on Solid Footing

Good news for hoteliers: hotels will continue to see strong growth in 2012, primarily driven by rate increases and strong, steady demand for hotel rooms, according to TravelClick’s December 2011 North American Hospitality Review (NAHR). The NAHR is based on actual hotel bookings from Q4 2011 through Q3 2012.

Over the next twelve months, committed occupancy is up three percent year-over-year; average daily rate (ADR) is up 3.6 percent; and revenue per available room (RevPAR), the top-line indicator, is tracking ahead by 5.3 percent.

“As we enter 2012, TravelClick data shows a ‘slow and steady’ increase in hotel performance,” said Tim Hart, executive vice president, business intelligence solutions, TravelClick.

“The business travel segment continues to be strong and group business shows slow but positive occupancy gains. Overall occupancy has consistently improved over the past 26 consecutive months and as demand begins to plateau, hotels need to increase rates to leverage increasing demand and maximize revenue," Hart said.

The first quarter of 2012 will see a 6.6 percent gain in RevPAR, which is driven by a strong transient segment – individual business and leisure travelers.  January and March prove to be key months in the first quarter of 2012, with 8.4 percent and 9.2 percent increases in RevPAR. Overall occupancy in the first quarter is expected to increase 2.5 percent and ADR is expected to increase 3.2 percent. While group commitments for this period are set to increase 1.8 percent, average daily rates will decrease by 1.4 percent for this segment.

Overall, TravelClick reports that the Q4 2011 shows a 5 percent RevPAR gain compared to Q4 2010, which is the slowest growth of any quarter in 2011. Throughout November 2011, RevPAR increased 6.8 percent over last year with a 2.5 percent increase in committed occupancy and a 4.3 percent increase in ADR. In December, hotels experienced moderate gains in occupancy, ADR and RevPAR, up 2.6 percent, 3 percent and 5.2 percent, respectively. 


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