Thursday, June 14, 2012

Hotels: Occupancy Rate close to Pre-Recession Levels

by Bill McBride on 6/14/2012 03:54:00 PM

From HotelNewsNow.com: Luxury hotels on top in weekly results

Overall, the U.S. hotel industry’s occupancy ended the week with a 1.3% increase to 68.5%, ADR increased 5.1% to $107.48 and RevPAR rose 6.5% to $73.59.
Hotel occupancy, ADR and RevPAR have improved from 2011, and occupancy is back close to normal. ADR is now back to precession levels.

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using a four week average.

Hotel Occupancy Rate Click on graph for larger image.

The red line is for 2012, yellow is for 2011, blue is "normal" and black is for 2009 - the worst year since the Great Depression for hotels.

Looking forward, leisure travel usually increases over the summer months, and occupancy rates will probably average 70% for the next couple of months. So far it looks like 2012 will have higher occupancy than 2011, and be close to the pre-rececession median. Hotels have come a long way since 2008 when I was writing about The Coming Hotel Bust. But it will be sometime before investment increases again.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

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