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Strong Individual Leisure and Business Bookings Buoy Hotel Sector through End of the Year

Strong Individual Leisure and Business Bookings Buoy Hotel Sector through End of the Year.

Monday, November 30, 2015
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TravelClick, an Amadeus company
TravelClick, an Amadeus company
Data/Reservations/Media/Web/Guest Mgmt

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.”

Twelve-Month Outlook (November 2015 – October 2016)

For the next 12 months (November 2015 – October 2016), 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.

Fourth Quarter 2015

ADR Reserved Occupancy** RevPAR
All Travel Segments 3.40% 1.80% 5.20%
Group Only 2.50% 4.90% 8.70%
Transient Only (business Leisure) 3.20% 0.60% 3.90%
Transient Business 3.50% -0.80% 2.70%
Transient Leisure 3.30% 2.30% 5.70%

First Quarter 2016

ADR Committed Occupany*
All Travel Segments 6.9% 0.1%
Group Only 6.5% -1.2%
Transient Only (business Leisure) 7.0% 5.7%
Transient Business 11.7% -2.0%
Transient Leisure 5.7% 10.2%

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 November 1, 2015, from the period of November 2015 to October 2016.
* Committed Occupancy – (Transient rooms reserved group rooms committed) / capacity
** Reserved Occupancy – Total number of rooms reserved / capacity
The fourth quarter combines historical data from October and forward-looking data from November and December.

About TravelClick, Inc.
TravelClick (TravelClick.com) provides innovative cloud-based solutions for hotels around the globe to grow their revenue, reduce costs and improve performance. TravelClick offers hotels world-class reservation solutions, business intelligence products, and comprehensive media and marketing solutions to help hotels grow their business. With local experts around the globe, we help more than 38,000 hotel clients in over 160 countries drive profitable room reservations through better revenue management decisions, proven reservation technology and innovative marketing. Since 1999, TravelClick has helped hotels leverage the web to effectively navigate the complex global distribution landscape. TravelClick has offices in New York, Atlanta, Chicago, Barcelona, Dubai, Hong Kong, Melbourne, Orlando, Shanghai, Singapore and Tokyo. Follow us on twitter.com/TravelClick and facebook.com/TravelClick.
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