USA
The U.S. hotel industry reported positive results in the three key performance metrics during the third quarter of 2017, according to data from STR.
Compared with Q3 2016:
- Occupancy: +0.5% to 71.4%
- Average daily rate (ADR): +1.4% to US$129.12
- Revenue per available room (RevPAR): +1.9% to US$92.20
“The 71.4% occupancy level was the best for a third quarter since 1995,” said Bobby Bowers, STR’s senior VP of operations. “That was especially significant given that supply grew year over year at a higher rate than any quarter since Q2 2010. Demand (roomnights sold), at the same time, was up almost 8 million roomnights from the third quarter of last year. But even with solid demand, ADR growth was the worst since Q4 2010, and RevPAR grew at its lowest rate since Q1 2010.”
Among the Top 25 Markets, Houston, Texas, saw the quarter’s only double-digit increases in occupancy (+11.8% to 67.4%) and RevPAR (+16.4% to US$68.94).
Other top RevPAR increases were reported in Orlando, Florida (+9.6% to US$82.30); Tampa/St. Petersburg, Florida (+7.3% to US$78.96); Nashville, Tennessee (+7.0% to US$111.29); and Detroit, Michigan (+6.0% to US$74.49).
Nashville’s RevPAR growth was due to the quarter’s highest increase in ADR (+7.5% to US$143.28).
“The quarter contained a lot of moving parts with events such as the Great American Eclipse in August, the Jewish holiday calendar shift from October 2016 to September 2017 and the post-hurricane demand in Houston and around parts of Florida,” Bowers said. “That all happened after the quarter started with a significant Group business decline (July) due to the comparison with the Republican and Democratic national conventions in Cleveland and Philadelphia last year.”
Affected by the national convention comparison, Philadelphia, Pennsylvania-New Jersey, experienced the steepest decline in each of the three key performance metrics. Occupancy fell 6.3% to 72.0%, ADR was down 11.5% to US$126.41 and RevPAR dropped 17.0% to US$91.06. .
New York, New York, posted the highest absolute values across the three key performance metrics: occupancy (90.4%), ADR (US$258.90) and RevPAR (US$234.10).
MIDDLE EAST & AFRICA
Hotels in the Middle East reported negative performance results during Q3 2017, while hotels in Africa posted growth across the three key performance indicators.
U.S. dollar constant currency, Q3 2017 vs. Q3 2016
Middle East
- Occupancy: -2.8% to 60.9%
- Average daily rate (ADR): -8.1% to US$145.50
- Revenue per available room (RevPAR): -10.7% to US$88.61
Africa
- Occupancy: +4.9% to 61.4%
- Average daily rate (ADR): +10.1% to US$97.79
- Revenue per available room (RevPAR): +15.5% to US$60.00
Local currency, Q3 2017 vs. Q3 2016
Lebanon
- Occupancy: +16.6% to 67.8%
- ADR: +10.5% to LBP251,024.45
- RevPAR: +28.9% to LBP170,158.02
STR analysts note that the country’s strong year-over-year growth for the quarter was due to considerably low performance levels over the past several years, caused by political unrest and security concerns. This was the strongest Q3 for Lebanon hotels since 2011. Additionally, September marked Lebanon’s highest actual occupancy level on record for the month (70.1%).
Saudi Arabia
- Occupancy: -1.7% to 55.3%
- ADR: -8.4% to SAR808.49
- RevPAR: -10.0% to SAR446.98
Saudi Arabia reported a considerable, 7.2% year-over-year increase in supply for the quarter, which countered a 5.4% uplift in demand (roomnights sold). STR analysts note that Group (bookings of 10 or more at one time) business was a significant driver of demand in August. Medina was the only tract in the country that recorded Q3 RevPAR growth (+2.4%), while Jeddah was the only market that recorded an increase in ADR (+5.0%). The country currently has more than 64,000 hotel rooms in the pipeline, and that should continue to affect performance levels in the short term as new properties come online.
South Africa
- Occupancy: -0.2% to 63.3%
- ADR: +1.3% to ZAR1,104.56
- RevPAR: +1.1% to ZAR699.36
South Africa’s marginal occupancy decline was due to a 2.0% increase in supply edging out a 1.8% increase in demand. Regardless, the country posted its highest ADR and RevPAR levels for any Q3 on record. At the market level, top RevPAR increases were reported in the North West Province (+13.4%), Eastern Cape (+8.5%) and Free State (+6.9%). Among segments, Luxury hotels saw the strongest growth, with ADR up 6.0% and RevPAR increasing 5.3%.
EUROPE
Europe’s hotel industry reported positive results in the three key performance metrics during Q3 2017.
Euro constant currency, Q3 2017 vs. Q3 2016
Europe
- Occupancy: +2.2% to 79.2%
- Average daily rate (ADR): +4.5% to EUR119.17
- Revenue per available room (RevPAR): +6.9% to EUR94.36
Local currency, Q3 2017 vs. Q3 2016
Germany
- Occupancy: +1.9% to 75.9%
- ADR: +2.0% to EUR102.21
- RevPAR: +3.9% to EUR77.60
The absolute levels in each of the three key performance metrics were the highest for any quarter on record in Germany. STR analysts note that performance was driven primarily by weekdays, which indicates strong corporate business in the country. At the market level,Berlin also reported strong performance with an 82.8% occupancy level and an all-quarter ADR record of EUR98.07. Additionally, Frankfurt posted its highest ADR (EUR117.28) for a third quarter, benefitting as host of the biennial Automobile Trade Fair (IAA) in September.
Portugal
- Occupancy: -0.5% to 86.4%
- ADR: +13.7% to EUR137.65
- RevPAR: +13.1% to EUR118.89
Despite a slight dip in occupancy, Portugal’s ADR and RevPAR levels were the highest for any third quarter on record in the country. Lisbon, which hosted the Annual Meeting of the European Association for the Study of Diabetes (EASD) in September, posted its highest ever Q3 ADR at EUR124.27. During the 5-day conference, year-over-year ADR increases ranged from 75.5% to 92.8%.
Slovakia
- Occupancy: +1.8% to 73.3%
- ADR: -5.6% to EUR62.99
- RevPAR: -4.0% to EUR46.19
Slovakia’s year-over-year comparisons were hindered mostly by September performance, with a 1.6% decline in occupancy and a 13.0% drop in ADR. However, STR analysts note that there was a high basis of comparison in September 2016, when EU presidency meetings were held in Bratislava. Year-over-year comparisons were difficult in July as well due to a busy month in 2016, with events such as the European Summits of Regions and Cities.
CENTRAL & SOUTH AMERICA
Hotels in the Central/South America region reported mixed year-over-year results in the three key performance metrics during Q3 2017.
U.S. dollar constant currency, Q3 2017 vs. Q3 2016
Central/South America
- Occupancy: +2.3% to 57.9%
- Average daily rate (ADR): -8.4% to US$100.36
- Revenue per available room (RevPAR): -6.3% to US$58.14
Local currency, Q3 2017 vs. Q3 2016
Argentina
- Occupancy: +10.1% to 62.6%
- ADR: +19.4% to ARS1,886.76
- RevPAR: +31.4 to ARS1,180.57
Demand (roomnights sold) grew 10.1% year over year, pushing occupancy to its highest level for a Q3 in Argentina since 2011. At the market level, Buenos Aires posted a 31.5% increase in RevPAR, due to double-digit growth in both occupancy and ADR. STR analysts note that convention center calendars were quite full in September. The market also played host to an ITF tennis tournament (11-17 September) and a rugby match with New Zealand (30 September).
Chile
- Occupancy: +6.5% to 68.6%
- ADR: -1.1% to CLP74,127.71
- RevPAR: +5.3% to CLP50,872.16
This marked Chile’s highest Q3 occupancy level since 2008. STR analysts note that the country’s hotel demand has grown steadily since the end of 2015, while ADR has gradually decreased since Q2 2016. In its latest Forecast for Chile, Oxford Economics noted that improved activity in the country seems to have extended into Q3. While outlooks remain cautious, consumer spending momentum is likely to continue into 2018.
Colombia
- Occupancy: +1.6% to 59.2%
- ADR: +0.4% to COP255,624.52
- RevPAR: +2.0% to COP151,418.29
After a weak first half of the year, Colombian hotels experienced 4.1% uplift in demand in Q3. This was mainly the result of stronger performance in July and August, as September results were negative. Pope Francis’ visit to Bogotá in September drove the Colombian capital’s RevPAR up 35.6% on Saturday, 9 September.
ASIA PACIFIC
Hotels in the Asia Pacific region reported positive results in the three key performance metrics during Q3 2017.
U.S. dollar constant currency, Q3 2017 vs. Q3 2016
Asia Pacific
- Occupancy: +3.3% to 73.5%
- Average daily rate (ADR): +1.6% to US$98.39
- Revenue per available room (RevPAR): +5.0% to US$72.36
Local currency, Q3 2017 vs. Q3 2016
India
- Occupancy: +0.9% to 62.4%
- ADR: +2.7% to INR5,265.96
- RevPAR: +3.6% to INR3,287.73
Healthy supply growth (+3.0%) once again limited occupancy and rate growth in the country. In absolute terms, however, occupancy reached its highest level for a Q3 in India since 1996. ADR hit its highest Q3 absolute value since 2012. Additionally, STR analysts note that there were almost 8,000 less rooms in the development pipeline in India compared with last September.
New Zealand
- Occupancy: +0.7% to 75.9%
- ADR: +10.3% to NZD177.89
- RevPAR: +11.0% to NZD134.99
According to STR analysts, New Zealand remains one of the strongest performers in the region due to consistent demand and a lack of significant supply growth. Figures from the Ministry of Business, Innovation and Employment showed that the country welcomed a record-breaking 3.7 million international visitors through August, which was a 9.2% increase compared with the same eight months in 2016. Holiday arrivals were the main contributor to the growth in arrivals.
South Korea
- Occupancy: -9.4% to 68.2%
- ADR: -5.7% to KRW151,106.19
- RevPAR: -14.6% to KRW103,094.24
ADR has decreased year over year for 36 consecutive months in South Korea (since September 2014) with massive supply growth playing a role in the equation. Since the beginning of 2015, the country has added more than 369,000 hotel rooms, and demand growth is not nearly keeping pace partly due to geopolitical tension in the region. STR analysts note that Group business has seen a noticeable decline, specifically with Chinese travelers. Given the volatility of the export balance with China as its biggest trade partner, South Korea is likely to fall back from its 17 million international arrivals in 2016, of which China accounted for nearly half. Through the first seven months of 2017, travelers from mainland China were almost halved in year-over-year comparisons, according to the Korea Tourism Organization.
