Hotel Industry Posts Gains Despite Lower Occupancies

Despite a downturn in occupancy levels, U.S. hotels posted increases in both average daily rate and revenue per available room for the month of July, according to Smith Travel Research.

In year-over-year measurements, occupancy fell 2.1 percent to end the month at 69.3 percent, while ADR increased 2.5 percent to $106.50, and RevPAR for July increased 0.4 percent to $73.81.

“Occupancy declined, due primarily to continued supply growth, but room demand [room nights sold] actually increased slightly,” said Bobby Bowers, senior VP of operations at STR. “Total industry RevPAR inched ahead 0.4 percent, but the largest 25 markets experienced 2.1 percent growth, driven by New York, Houston, San Francisco, and D.C.”

Year-to-date occupancy fell 2.5 percent to 62.6 percent, while ADR reached $107.45, a 3.9 percent increase. At $67.24, RevPAR is up 1.3 percent for the first seven months of the year.

The dip in occupancy rate in the U.S. for the month of July was reflected the world over. Occupancies fell in all but the Middle East/Africa region, which ranked first in each of the three performance categories.

European hotels sampled by STR Global showed ADR growth of 14.1 percent for July, but occupancies fell 2.3 percent to 70.3 percent and RevPAR was up 11.5 percent, averaging $117.22.

Performance in the Asia-Pacific region was bolstered by strong rate growth--up 14.8 percent in July--to offset declining occupancies, according to an STR release. July saw Asia-Pacific hotel occupancy fall 7 percent to 65.4 percent, the worst decline among the four regions, although the region’s RevPAR gained 6.8 percent in July, averaging $89.32.

Performance in the Americas region was weakened by the Caribbean sub-region, which was the only area in the survey to record declining room rates (down 8 percent) as well as declining RevPAR (down 9.9 percent) for the month. For more, visit Smith Travel Research.

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