US Hotel Revenue Drops As Recession Hits Home
According to leading web site that monitors the hotel industry--www.hotelsmag.com--the U.S. hotel industry posted a double-digit drop in revenue per available room during 2009.
The industry metric plunged a record 16.7% to US$53.71, the largest year-end decrease of any of the three key measurements in history according to data from STR, the industry watchdog.
The industry's occupancy fell 8.7% to 55.1 % for the year and average daily rate dropped 8.8% to US$97.51.
None of the Top 25 Markets reported increases in any of the three key metrics for year-end 2009. Three markets posted occupancy decreases of less than 5 percent: Norfolk-Virginia Beach, Virginia (-3.3 percent to 53.2 percent); Washington, D.C. (-3.2 percent to 64.9 percent); and Oahu Island, Hawaii (-2.3 percent to 73.3 percent). Houston, Texas, ended the year with the largest occupancy decrease, falling 17.0 percent to 55.8 percent because of the lingering effects of Hurricane Ike. Meanwhile New Orleans was the only market to post a year-end ADR decrease of less than five percent, falling 4.0 percent to US$113.52. New York, New York, reported the largest ADR decrease, falling 21.8 percent to US$215.14, followed by Phoenix, Arizona which experienced a drop of 15.4 percent to US$105.72.
Two markets posted single-digit RevPAR decreases: Norfolk-Virginia Beach (-8.5 percent to US$44.47) and Washington, D.C. (-8.5 percent to US$94.04). New York ended the year with the largest RevPAR decrease, down 26.3 percent to US$166.11, followed by Phoenix with a 25.3-percent decrease to US$55.36. During December 2009, the industry's occupancy fell 1.9 percent to end the month at 44.2 percent. ADR dropped 6.0 percent to finish the month at US$93.73. RevPAR for the month decreased 7.8 percent to finish at US$41.46.
"While we were encouraged by the positive demand performance the industry experienced in December, we believe this may be more the result of an easy comparison to last year and the timing of New Year's Eve," Lomanno said. "In the coming months, we hope to see similar results."
Among the Chain Scale segments, two segments ended the month with occupancy increases. The Luxury segment rose 5.0 percent to 54.6 percent, and the Upper Upscale segment was up 2.6 percent to 52.2 percent. The Upscale segment ended the month virtually flat in occupancy growth with a 0.1-percent decrease to 50.0 percent. Among the Top 25 Markets, New Orleans led the increases in all three key metrics. The market's occupancy rose 11.0 percent to 53.4 percent, ADR increased 16.4 percent to US$120.12, and RevPAR jumped 29.2 percent to US$64.10.
Aside from New Orleans, two markets experienced occupancy increases of more than 5%: Oahu Island, Hawaii (+7.1% to 72.5%), and Tampa-St. Petersburg, Florida (+5.4% to 47.1% ). Houston posted the only double-digit occupancy decrease, falling 21.4% to 44.7%.New Orleans was also the only market to report an ADR increase. San Francisco/San Mateo, California, posted the largest ADR decrease, falling 17.4 percent to US$117.39, followed by Houston (-13.3 percent to US$81.73), Chicago, Illinois (-13.2 percent to US$99.01), and Phoenix (-13.1 percent to US$89.35).
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