The TravelClick Perspective – February 2014
Markets is showing an increase of 4.2% in committed occupancy for February 2014 - January 2015, based on group commitments and individual reservations on the books as of January 26, 2014 compared to the same time last year. The group segment is up 3.8% in room nights committed (contracted). New group business added over the last month (pace) are up, 10.1% over the comparable period last year. Transient room nights booked are up 5.7% compared to the same time last year. Average daily rate (ADR) is growing slightly above occupancy, up 3.2% based on reservations currently on the books for 2014.
The hotel industry outlook for the top 25 North American
Committed occupancy for the group segments is up 3.5% and the transient segment is up 2.4% compared to a year ago. Average daily rate for the first quarter is up 2.9% over the same time last year. Business segment ADR, which includes weekday transient negotiated and retail segments, is up 3.2%. Leisure segment ADR, which includes transient discount, qualified and wholesale segments, is up 3.2%.
A Promising Outlook for 2014
If you happened to listen to the
However, there were positive indications from most companies that group demand is stronger nowthan it has been over the last year. Most are reporting group pace to be up by 3-5% over last year. With as much as 70% of the 2014 group demand already on the books, this is a strong indicator of expected group performance for the year. While the consensus outlook is strong, there were some cautionary notes regarding risks. The primary concerns were the effects of economic headwinds in the emerging markets (especially in the face of higher supply growth) and lack of strong income and employment growth in the US.
The outlook reported by these owners and operators of hotels is very consistent with TravelClick'sview of the market, which comes from aggregated future-looking group sales and reservations data collected from major hotel chains and independent hotels. The table below shows the current outlook for 2014 based on group commitments and reservations on the books versus the same time last year.
As you can see, we share the more bullish outlook for the group segment. While occupancy growthfor group was basically flat in 2013, we see that contracted group room nights for 2014 are currently ahead of last year by 3.5%. As mentioned above, given how far in advance groups book, this early pace is a strong indicator of expected performance for that segment. While the transient segment booking window is much shorter than group, early indications are that the transient segment will continue to perform well in 2014. Transient occupancy and ADR growth are both moderately strong. The transient themes of 2013 continue, with growth being led by the retail and discount segments, while the qualified segment is still struggling. The weaker performance of the transient qualified segment is largely due to continued softness in government demand.
The news from all fronts remains positive. But as the saying goes, 'your results may vary'. Industryfundamentals are favorable. It is up to each individual operator to use experience and sound judgment along with the best available data and tools to drive superior outcomes.
The chart below shows the year-over-year position
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Information in this newsletter covers the top 25 markets in North America and is based on datasupplied by brands participating in TravelClick's Demand360® reporting.