Thursday, May 12, 2016

Hotels: Occupancy Rate Tracking just behind Record Year

by Bill McBride on 5/12/2016 10:40:00 AM

First on hotel profits from HotelNewsNow.com: STR: US hotel profit margin surpasses 2007 peak

Total industrywide house profit reached almost US$73 billion, a year-over-year increase of 9.4% on a per-available-room basis. On an absolute nominal basis, the house profit represents an all-time high, and the house profit margin for 2015 exceeds the previous industry peak reached in 2007.
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In real terms, the industry’s total revenue in 2015 surpassed the levels realized at the previous peak of 2007, but remained below the peak in 2000. Similarly, the house profit realized in 2015 was the second-best profit level since 1990, behind only the peak of US$15,248 per-available-room in 2000.
And on occupancy from HotelNewsNow.com: STR: US hotel results for week ending 7 May
he U.S. hotel industry recorded mixed results in the three key performance metrics during the week of 1-7 May 2016, according to data from STR.

In year-over-year comparisons, the industry’s occupancy decreased 1.6% to 65.8%. However, average daily rate for the week was up 2.1% to US$123.43, and revenue per available room increased 0.4% to US$81.19.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.  The occupancy rate should mostly move sideways for the next couple of months, and then increase further during the Summer travel period.

Hotel Occupancy RateThe red line is for 2016, dashed orange is 2015, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.

2015 was the best year on record for hotels.

So far 2016 is tracking just behind 2015.

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