Sunday, December 18, 2016

Hotels: Strong Finish to 2016, Could be Best Year Ever

by Bill McBride on 12/18/2016 08:11:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 10 December

The U.S. hotel industry reported positive results in the three key performance metrics during the week of 4-10 December 2016, according to data from STR.

In year-over-year comparisons, the industry’s occupancy increased 1.7% to 59.2%, and average daily rate (ADR) was up 3.9% to US$120.12. As a result, revenue per available room (RevPAR) grew 5.7% to US$71.08.

STR analysts note that the week’s performance was helped by a comparison to a 2015 week that included the first day of Hanukkah.
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 2015, and well ahead of the median rate.    With a solid finish over the remaining weeks, 2016 could be the best year on record.

Year-to-date, the three best years are:
1) 2016: 66.69% average occupancy.
2) 2015: 66.68% average.
3) 2000: 65.5% average.

For hotels, the Fall business travel season is over and the occupancy rate will decline during the holiday season.

Data Source: STR, Courtesy of HotelNewsNow.com