Thursday, May 21, 2009

Gloom by the Room: Hotel Industry Declines Continue

Anyone looking for a sign that the travel slump has bottomed out won't find evidence in the domestic hotel business.

The U.S. hotel industry posted declines in all three key performance measurements during the week of ending May 16, according to Smith Travel Research. As has been the case since last fall, luxury hotels had the worst performance.

Compared with corresponding week in 2008, occupancy for all hotel segments fell 12.6 percent; average daily rates fell 10 percent and the key metric, revenue per available room, fell 21.4 percent.

Smith said that none of the top 25 markets showed increases in any of the three performance metrics. Atlanta posted an 18.8-percent decline in occupancy, the largest of any market. The smallest occupancy decrease was recorded by Washington, D.C.-Maryland-Virginia (-5.4 percent to 79.4 percent).

Two cities experienced average room rate declines of more than 20 percent: New York, down 31.6 percent and San Francisco/San Mateo, down -22.8 percent.

Continuing a plunge from the fat times of recent years, New York reported the largest decrease in revenue per available room -- down 39.4 percent.

Among the seven chain-scale segments, the Midscale with Food and Beverage segment posted the largest drop in occupancy (-14.6 percent). The Luxury segment led the performance declines in the remaining two performance measurements. It experienced a 20.1-percent average daily rate decline to $237.05, and a 31.3-percent fall in revenue per available room, to $150.40, Smith said.


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