Earlier this week, TravelClick released its September 2011 North American Hospitality Review with some good news for the hotel industry. The firm, which tracks hotel bookings 12 month into the future, indicated demand for the remainder of 2011 will continue to be strong. And, demand should continue to remain strong for the next year, although some leveling off is to be expected.
Earlier today I spoke with Erik Lindquist, vice president of business intelligence at TravelClick, and he told me that demand numbers are up over the same time last year. For the next 12 months, committed occupancy is up 2 percent year-over-year, while average daily rate (ADR) is up 4.8 percent, and revenue per available room (RevPAR) is tracking ahead by 6.1 percent. That’s all good news, but hoteliers should keep in mind that the current pace is expected to level off—still leaving strong increases, however.
“We’re also seeing at the same time that demand pace is slowing,” Lindquist said. “In recent months we’re showing that we’re trending down a little.”
What that means, according to Lindquist, is that the historic highs in demand, in terms of rooms being booked, that we’re seeing will slow. “While we had stronger months this year, in recent months, the pace of the growth we think is going to level off,” he said. That will still leave demand growing, just not as fast.
Business travelers continue to be the driver of demand growth, regardless of pace. As the leisure season ends, business travelers become the focal point. “It’s a natural season occurrence,” Lindquist said. TravelClick does say it sees business travel bookings picking up. In Q3 2011 business travel is up 4 percent in both committed occupancy and ADR compared to last year, according to TravelClick.
TravelClick says several markets are showing the most year-over-year occupancy growth, including Detroit, Indianapolis, Philadelphia, Seattle, and Chicago. Meanwhile, some markets are showing negative occupancy growth, including Washington, D.C., Honolulu, Minneapolis-St. Paul, Denver, and Miami.
As the industry anxiously awaits the return of RevPAR increases, tracking demand is something all hoteliers have their eyes on. As demand grows, so too, should rate. How will next year play out? It remains to be seen, but the early indications on demand growth remain positive.