ROCKVILLE, Md. — Kalibri Labs recently released its November 2019 Market Kalibration report, sharing insights into hospitality industry trends and opportunities. “Our November 2019 Market Kalibration report showcases several underappreciated bright spots in the U.S. hotel industry, along with a few key areas where additional optimization by operators, CVBs, and asset management could yield enhancements in profitability and returns,” said Mark Lomanno, partner and senior advisor, Kalibri Labs.
“One always has to be cognizant of holiday shifts, such as the shift in the timing of Thanksgiving this month, as well as other potential influences such as weather; however, examining November’s results within the broader context of the year-to-date trends provides an excellent starting point for maximizing growth and profitability,” said Lomanno.
November 2019 Market Kalibration Report Highlights
The November 2019 Market Kalibration report found that growth in hotel demand exceeded supply growth, both in November and year to date (YTD), as evidenced by increases in both guest-paid RevPAR and occupancy.
Both the November and YTD booking windows and average length of stay continue to compress, making optimal channel mix more important than ever.
The gap between guest-paid revenue and hotel-collected revenue increased in both November and YTD as compared to the same period last year, suggesting that additional channel optimization could lead to higher revenue capture.
YTD growth in Brand.com room nights outpaced growth in OTA room night growth through November and exceeded branded hotel supply growth by a wide margin. As of Q3 2019, supply growth remained at 2 percent year-over-year, according to CBRE.
Total U.S. loyalty contribution increased 7.6 percent year-over-year as of YTD to 56 percent of total bookings. When the book direct campaigns began in 2016, total year-end U.S. loyalty contribution was 47.9 percent.
As of November YTD, the higher a property’s Global Review Index (GRI), a measure of online reputation by ReviewPro, the more booking cost controls the properties exhibited. Properties rating over 90 percent GRI experienced a 2.5 percent decrease in booking costs while those properties rating below 75 percent GRI had a 3.3 percent increase in booking costs.
Market-Specific Highlights
In November, Miami experienced above-average occupancy gains, offset by declines in both guest-paid ADR (down 2.6 percent) and COPE* ADR (down 3.0 percent). This suggests declining channel mix efficiencies given that not only the average guest-paid ADR is decreasing, but also the mix of business is becoming more expensive to attain.
New York City’s length of stay is down over 11 percent YTD, the largest decline in the top 10 markets, and the booking window continues to compress. These metrics suggest that layering on additional group business or considering promotions aimed at increasing length of stay earlier in the booking window may enhance profitability.
Hotels in Los Angeles and Chicago, on average as of YTD, experienced declines in guest-paid ADR despite above-average occupancy gains, suggesting opportunities for more profitable distribution strategy.
*Contribution to Operating Profit and Expense—Revenue per available room based on the total room revenue paid by guests, after transaction-specific direct reservation costs have been deducted (e.g., retail commissions, wholesale commissions, channel costs, TA amenity costs, and loyalty investment).
