NEW YORK—As hoteliers prepare for the start of 2016, properties in major North American markets are experiencing strong transient (individual business and leisure) bookings, as well as upticks in average daily rates, leading to strong RevPAR (revenue per available room) growth. However, when it comes to the group segment, hotels have experienced a deceleration in commitments/bookings, as they are down -3.8 percent year-over-year, according to new data from TravelClick’s November 2015 North American Hospitality Review (NAHR).
“The recent increase in new transient reservation pace is welcomed news for hoteliers, especially coming within the final months of 2015,” said John Hach, TravelClick’s senior industry analyst. “However, new business demand for the group segment is softening and has the potential to impact occupancy growth moving forward. It’s vitally important for hoteliers to opportunistically invest in marketing over the upcoming months to recoup potential losses in group bookings. Consumers are constantly engaged and actively searching for hotels that promote added value inclusions like free breakfast, Wi-Fi and more. Hoteliers who understand this behavior and aggressively market their properties can safeguard RevPAR performance throughout periods of weakening demand.”
For the next 12 months, transient bookings are up 2.2 percent year-over-year, and ADR for this segment is up 3.1 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is showing occupancy gains of 4.9 percent and ADR gains of 3.1 percent. The transient business (negotiated and retail) segment is down -1.3 percent, but ADR is up 3.8 percent. Group segment occupancy is up 3.2 percent, and ADR has increased 3.9 percent when compared to the same time last year.
Hach added, “Moving into 2016, committed occupancy is flat year-over-year, creating further dependency on average daily rate (ADR) increases to sustain RevPAR performance. However, TravelClick data indicates that occupancy growth will pick up later into 2016. With solid business intelligence and a marketing plan to support the valleys and peaks in demand, hotels should still be able to grow rates in the near-term.”
The November NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by Nov. 1, 2015, from the period of November 2015 to October 2016.
[…] It’s hard to pinpoint the moment when Big Groups started to falter. But falter they did, as ticket pricing became ever more transparent. It’s a trend that reaches cross industry, including hospitality, where group bookings have been dropping 3.1%, year on year. […]