Hotels Remain Resilient into New Year: Room Rates Are Primary Driver of Growth in Q4 2015 and Q1 2016

Hotels Remain Resilient into New Year: Room Rates Are Primary Driver of Growth in Q4 2015 and Q1 2016

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.” 

Twelve-Month Outlook (December 2015 – November 2016)  

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 4.0 percent for the next 12 months – the pace of bookings has slowed. 

“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,” added Hach. “These areas of growth are becoming increasingly localized and necessitate closely monitoring key nearby hotels and emerging alternative lodging competitors.”    

The December NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by December 1, 2015, from the period of December 2015 to November 2016. 

* Committed Occupancy – (Transient rooms reserved + group rooms committed) / capacity

** Reserved Occupancy – Total number of rooms reserved / capacity 

The fourth quarter combines data from October and November and forward-looking data from 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.