Thursday, November 13, 2014

Hotels: Occupancy Rate Finishing 2014 Strong

by Bill McBride on 11/13/2014 12:27:00 PM

From HotelNewsNow.com: STR: US results for week ending 8 November

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 2-8 November 2014, according to data from STR, Inc.

In year-over-year measurements, the industry’s occupancy rose 3.5 percent to 66.2 percent. Average daily rate increased 5.4 percent to finish the week at US$117.48. Revenue per available room for the week was up 9.1 percent to finish at US$77.74.
emphasis added
Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

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

Business travel has peaked for the Fall season, and now hotels are heading into the slow period.

Hotel Occupancy Rate Click on graph for larger image.

The red line is for 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.  Purple is for 2000.

The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and since mid-June, the 4-week average of the occupancy rate has been a little higher than for the same week in 2000.

Right now it looks like 2014 will be the best year since 2000 for hotels.  And since it takes some time to plan and build hotels, I expect 2015 will be even better for hotel occupancy.

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