TravelClick: Hotels Push Rate As Bookings Increase

Direct Booking - travel spending in first quarter 2018

NEW YORK—As hoteliers round out 2015 and head into the new year, properties in major North American markets are experiencing steady increases in bookings, with 21 of the top 25 markets showing committed occupancy growth within the past month. However, there continues to be a strong reliance on increasing average daily rates (ADR) to achieve revenue per available room (RevPAR) growth, which will remain critical into 2016, according to new data from TravelClick’s December 2015 North American Hospitality Review (NAHR).

“The new reservation growth in the final month of this year is welcomed news for hoteliers across North America,” said John Hach, TravelClick’s senior industry analyst. “The overall reservation trend is positive, especially given recent headlines and concern over terrorism, showing that North America continues to be a strong market. As ADR continues to be the key driver of RevPAR growth, we foresee this trend continuing, making it increasingly important for hoteliers to leverage advance booking business intelligence solutions to actively manage unanticipated local market developments.”

For the next 12 months (December 2015–November 2016), transient bookings are up 1.2 percent year-over-year, and ADR for this segment is up 2.7 percent. When broken down further, the transient leisure (discount, qualified, and wholesale) segment is showing occupancy gains of 4.6 percent and ADR gains of 2.8 percent. The transient business (negotiated and retail) segment is down -3.2 percent, but ADR is up 3.5 percent. Lastly, while the group segment shows resiliency—demand is up 2.5 percent, and rate is up 4 percent for the next 12 months—the pace of bookings has slowed.

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“2015 is ending on a resilient note, and this is carrying over into 2016; thus, there will continue to be viable opportunities for hoteliers to increase revenue and capitalize on the strength of the North American market,” Hach added. “These areas of growth are becoming increasingly localized and necessitate closely monitoring key nearby hotels and emerging alternative lodging competitors.”