Finance & DevelopmentFinanceNew Spring Reservation Demand Weakens

New Spring Reservation Demand Weakens

NEW YORK—New reservation commitments added over the last month are down -7.1 percent, according to new data from TravelClick’s April 2016 North American Hospitality Review (NAHR). These numbers highlight hotels’ continued fragmented performance during this season.

However, there remains some positive news, as 18 of the top 25 North American markets are still showing overall year-over-year increases in committed occupancy growth.

“New reservation growth has considerably weakened over the past month,” said John Hach, TravelClick’s senior industry analyst. “The decline is more prevalent within the business travel segment and is now impacting overall transient demand. On the positive side, committed occupancy is showing an increase of 2.5 percent over last year, and there is encouraging group reservation demand in the majority of North American markets.”

For the next 12 months (April 2016–March 2017), transient bookings are down -0.2 percent year-over-year, and ADR for this segment is up 2.0 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is relatively flat, showing occupancy gains of 0.2 percent, with ADR gains of 2.3 percent. The transient business (negotiated and retail) segment is down -1.9 percent, but ADR is up 2.1 percent. Lastly, group bookings are up 3.7 percent in committed room nights over the same time last year, and ADR is up 3.6 percent.

“As we move through the second and third quarter of 2016, to successfully navigate through these new headwinds, it’s imperative that hoteliers vigilantly reexamine local market conditions by utilizing advance reservation business intelligence solutions,” added Hach. “Best practices encompass closely monitoring competitive rates and inclusions. Too often hoteliers focus only on monitoring competitive rates, but standard competitive inclusions must be carefully assessed with rate canvassing strategies to maximize local advantage, especially given current market conditions.”

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