Thursday, December 11, 2008

Hotel Slump Worsens; Luxury Properties Hardest Hit

Hotels, which first felt the effects of a decline in travel in late summer, are facing business conditions that continue to deteriorate. And luxury hotels, which got severely hammered as Wall Street tanked this fall, are feeling the slump most of all, according to Smith Travel Research.

During the week of Nov. 30 through Dec. 6, compared with the similar week in 2007, U.S. hotel occupancy fell 9.8 percent; revenue per available room (RevPAR) dropped 12.7 percent and average daily room rates dropped 3.2 percent, Smith, the world's leading hotel research firm, said today.

Jan Freitag, the vice president of global development for SMith, said: "This is now four out of the past five weeks that we’ve seen double-digit RevPAR declines, which are driven by double-digit occupancy declines" in most chain hotel segments.

The luxury hotel segment had the biggest drops across the board, including a 13.0-percent decrease in occupancy, a 7.6-percent drop in average daily room rate and a 19.7-percent fall in RevPAR. The segment called "midscale without food and beverage" -- hotels such as Hampton Inn and Marriott Courtyard -- was the only segment to have an increase in any of the three key performance measurements. Its average daily room rate rose 0.3 percent.

The markets that saw the greatest drop in occupancy were Phoenix (where it dropped 22.2 percent); Seattle (-19.7 percent) and San Diego (-18.1).

The markets that saw the largest decreases in RevPAR were Phoenix (-25.4 percent); Atlanta (-24.5 percent) and New York (-22.8 percent).

The markets that experienced the greatest increase in RevPAR were New Orleans (+18.7 percent) Chicago (+18.4 percent) and San Francisco/San Mateo (+10.6 percent).


No comments: