hotel occupancy

Europe led the global regions in terms of hotel occupancy and average daily rate growth during the second quarter of 2016, according to STR. But industry results and commentary from the recent round of earnings calls indicate occupancy is flattening out and average daily rate growth pace is also slowing.

In Europe, occupancy crept up 0.6 percent year over year to 73.9 percent and ADR increased 2.1 percent to €114.33. Asia/Pacific pegged the largest year-over-year occupancy growth, up 1.3 percent to 68.3 percent, but ADR declined 1.1 percent to $96.95. The Americas region reported a 0.4 percent increase in occupancy to 68.7 percent and a 2.2 percent ADR increase to $123.88. In the Middle East and Africa, occupancy decreased 5.5 percent to 62.9 percent and ADR fell 3 percent to $169.99.

Positive results in North America offset weakness in Latin America and the Caribbean as a result of concerns over the Zika virus in the Americas region during the second quarter.

Occupancy was nearly flat year over year in the region overall (up 0.6 percent to 69.2 percent), as well as in Canada (up 0.4 percent to 67.1 percent) and Mexico (down 0.5 percent to 63.3 percent). North American ADR rose 2.6 percent to $123.87. In Canada, ADR increased 2.5 percent in local currency terms, and in Mexico, ADR climbed 15.8 percent in local currency terms. In the United States, hoteliers reported positive results in Los Angeles and Atlanta, however, low oil prices continued to weaken performance in Houston.

In Asia/Pacific, hotel results were mixed country-to-country during the second quarter. Marriott and Hyatt both saw positive year-over-year rebounds in South Korea after last year’s MERS outbreak. Seoul posted a 13.1 percent rise in occupancy to 77.3 percent, but a 1.3 percent decline in ADR in local currency terms, according to STR.

Hilton and Hyatt reported RevPAR gains between 4 percent and 5 percent in mainland China, with Marriott reporting particular strength in Shanghai and Beijing. In Hong Kong, Hyatt reported strong group business at its hotels, while Marriott saw “modest growth” in RevPAR and Hilton saw a 5 percent year-over-year dip.

Middle East & Africa
Geopolitical instability and low oil prices have challenged results in the Middle East and Africa, but the earlier timing of Ramadan gave a boost to some hotels in the region during the second quarter. Hilton reported an 8.1 percent year-over-year RevPAR increase but is forecasting a decline for its full-year results. Marriott, meanwhile, saw lower occupancy rates in the region and cited oversupply as a negative influencer in its second-quarter results.

Read full article at Business Travel News