Thursday, August 13, 2009

Hotel RevPAR off 16.5 Percent

by Calculated Risk on 8/13/2009 01:51:00 PM

From HotelNewsNow.com: STR reports US performance for week ending 8 August 2009

In year-over-year measurements, the industry’s occupancy fell 7.5 percent to end the week at 65.9 percent. Average daily rate dropped 9.7 percent to finish the week at US$97.32. Revenue per available room for the week decreased 16.5 percent to finish at US$64.10.
Hotel Occupancy Rate Click on graph for larger image in new window.

This graph shows the YoY change in the occupancy rate (3 week trailing average).

The three week average is off 7.3% from the same period in 2008.

The average daily rate is down 9.7%, and RevPAR is off 16.5% from the same week last year.

Comments: This is a multi-year slump. Although the occupancy rate was off 7.5 percent compared to last year, the occupancy rate is off about 11 percent compared to the same week in 2007.

Peak Weekly Hotel Occupancy RateAs I noted last week, the end of July and beginning of August is the peak leisure travel period. The peak occupancy rate for 2009 was probably three weeks ago at 67%.

And that is far below normal ... and it is all downhill from here for the rest of the year.

Note: Graph doesn't start at zero to better show the change.

Business travel is off much more than leisure travel, so the summer months are not as weak as other times of the year. September will be the real test for business travel.

Meanwhile supply is still growing at about 3% this year, see here:
STR projects that at the end of 2009, supply will be up 3.0 percent, demand will be down 5.5 percent, occupancy will decline 8.4 percent, average daily rate will drop 9.7 percent, and revenue per available room will be down 17.1 percent.
Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com