Friday, November 11, 2016

Hotels: Occupancy Rate on Track to be 2nd Best Year

by Bill McBride on 11/11/2016 01:56:00 PM

Note: The year-over-year decline this week was related to timing of Halloween, but, in general, hotels are finishing the year strong. It is unlikely, but still possible that 2016 could be the best year ever for hotel occupancy.  2016 will be at least the 2nd best ever behind 2015.

From HotelNewsNow.com: STR: US hotel results for week ending 5 November

The U.S. hotel industry reported mixed results in the three key performance metrics during the week of 30 October through 5 November 2016, according to data from STR.

In year-over-year comparisons, the industry’s occupancy fell 3.5% to 64.0%. Average daily rate (ADR) increased 1.6% to US$123.17. Revenue per available room (RevPAR) decreased 1.9% to US$78.82.

Opposite from last week, STR analysts cite a negative effect on results due to a Halloween calendar shift. The holiday was not included in the comparable week from 2015.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

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, and well ahead of the median rate.

Year-to-date, the three best years are:
1) 2015: 67.6% average occupancy.
2) 2016: 67.5% average.
3) 2000: 66.9% average.

For hotels, the Fall business travel season is slowing down, and the occupancy rate will decline into the holiday season.

Data Source: STR, Courtesy of HotelNewsNow.com