Finance & DevelopmentFinanceReservation Pace Declines as Headwinds Strengthen for Hotels

Reservation Pace Declines as Headwinds Strengthen for Hotels

NEW YORK—The pace of new bookings is down this summer, with the business segment experiencing a -4.0 percent decline over the past 30 days. However, average daily rates (ADR) are slightly up 2.0 percent over the same time last year based on reservations that are currently on the books, according to new data from TravelClick’s July 2016 North American Hospitality Review (NAHR).

“As new July bookings have fallen by -3.6 percent compared to the same time last year, it’s becoming abundantly clear that there are stronger headwinds ahead for hoteliers in 2016,” said John Hach, TravelClick’s senior industry analyst. “However, year-over-year growth is still occurring, stemming from committed reservations that were generated throughout the first and second quarters.”

For the next 12 months (July 2016 – June 2017), transient bookings are up 3.2 percent year-over-year, and ADR for this segment is up 1.6 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is showing occupancy gains of 6.7 percent, with ADR gains of 1.8 percent. The transient business (negotiated and retail) segment is down -4.0 percent, but ADR is up 2.8 percent. Lastly, group bookings are up 6.1 percent in committed room nights over the same time last year, and ADR is up 3.2 percent.

“Heading into the third and fourth quarter of 2016, the new reservation pace decline is occurring at a time when there is growing concern of infectious disease and terrorism that have the potential to further erode travel demand,” added Hach. “The weakening new group booking pace also places additional pressure on obtaining revenue per available room (RevPAR) performance from the transient channels, where discounting is becoming more and more prevalent. As a result, it’s imperative that hoteliers take proactive measures to maximize their online presence to consumers and travel agents alike, especially as the peak summer travel season begins to fade.”