Hotel Industry Shows Demand and ADR Increases for Remainder of 2012

NEW YORK—Committed occupancy for August to December 2012 is up 5.4 percent and average daily rate (ADR) is up 5.0 percent. The growth is driven by the transient segment with an occupancy increase of 5.6 percent and an ADR increase of 5.5 percent in comparison to the same time last year, according to data from the August 2012 TravelClick North American Hospitality Review (NAHR). The August NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by August 5, 2012 for the period of August 2012 to July 2013.

For the current and upcoming three quarters, committed occupancy is up 3.9 percent and ADR is up 4.3 percent based on reservations on the books in comparison to the previous year. Occupancy growth is driven by the group segment with an increase of 4.6 percent, while the transient segment shows an increase of 3.0 percent. However, the transient segment leads the increase in ADR up 5.3 percent compared to 2.0 percent for the group segment.

“Business and leisure travel demand through the end of the year is strong with improving ADR” said Tim Hart, executive vice president, research and development as TravelClick, in an announcement. “Hoteliers can optimize rates, business mix and distribution to end the year strong and focus on strategies for 2013.”

Advertisement

Third Quarter Outlook
Committed occupancy for August and September is up 3.7 percent year-over-year, with group and transient segments showing demand increases of 3.6 percent and 3.7 percent respectively. Business demand, which includes the weekday transient negotiated and transient retail segments, is up 5.0 percent for August and September, and leisure demand, which includes transient discount and transient qualified segments, is up 2.2 percent for this same time period. Average daily rate for August and September is also up 4.6 percent over the same time last year.

Fourth Quarter Outlook
Committed occupancy for the fourth quarter continues to be strong, showing an increase of 8.0 percent year-over-year, as well as a 4.7 percent increase in ADR based on current reservations on the books. Group and transient demand is showing a 6.7 percent and 13.1 percent respective increase compared to last year. The ADR increase is driven with increases in the transient and group segments, up 5.3 percent and 3.4 percent respectively.