Another Record Breaking Year: U.S. Hotel Industry Reports $26.6 Billion in Profits in 2006 | Smith Travel Research | The Bench
Hendersonville, TN | The U.S. hotel industry had another record breaking year in 2006. Based on statistics compiled by Smith Travel Research (STR), the U.S. hotel industry generated $133.4 billion in total revenues and $26.6 billion in profits. Both numbers are industry records. Revenues increased by 8.7% from the $122.7 billion generated in 2005 and profits increased 17.9%, up from $22.6 billion last year.
Mark Lomanno, president of STR, commented: “Strong Average Daily Rate (ADR) growth of 7.2% fueled increased industry profitability. Relatively modest demand growth of 0.7% helped bolster operators’ pricing power as occupancy levels exceeded 63%. While such strong rate growth is not sustainable, the expected rate growth for the coming years is still well above the rate of inflation.”
For the year 2006 the industry recorded the following results:
Randy Smith, owner and founder of STR, added: “Profit margins increased to almost 20%, up from 18.4% last year. It is also worth mentioning that of the $10.7 billion in additional revenues the industry generated, over $4 billion flowed through to the bottom line.
Although hotel construction pipeline numbers have increased, it seems construction time has lengthened. In addition, new supply is regionally distributed and only a few major cities face potential overbuilding. We estimate new supply increases will have a slightly negative effect of -0.7% on occupancy in 2007. But ADR growth, while slowing, is projected to still be strong at around 6.0%. Fueled by this increase, 2007 will mark the first year that industry ADR breaks $100, another milestone in the industry’s history. We see no reason why the U.S. hotel industry should not be ‘Fine through ‘09’. ”
Smith Travel Research is the recognized leader for U.S. Lodging Industry benchmarking. For over 20 years, STR has collected monthly and daily operating data and reported on the state of the North American lodging industry, maintaining one of the world's largest lodging industry databases and publishing an array of valued industry research. For more about STR and its global services, please call +1 (615)824-8664 or email
The Bench, global partner with Smith Travel Research (STR), is a market leader in providing online daily, weekly and monthly benchmarking data to hotels worldwide. As the sole provider of an online benchmarking solution offering real time data, The Bench brings accurate hotel performance statistics to the market at an unparalleled speed. For more about The Bench and its global services, please contact James Chappell at +44 (0)20 7851 8142 or