Hotel results for the United States hotel industry are in, and revenue per available room is back on track after last month’s slow growth thanks to the calendar shift.
Here are 5 things you need to know about September’s performance data
1. September RevPAR increased 8%
I should add “as expected.” Further, I should add: “I told you so.” But I won’t.
It’s the reverse of the August calendar comp.
While the Labor Day shift had negative implications for August, it had a positive effect on the September numbers.
So, basically the 2.2% RevPAR growth in August and the 8% RevPAR growth in September add to an average over the two months of about 5% growth, certainly a good performance, even though not quite at the level we had seen prior to August.
Our forecast for the year still stands at 6.8% RevPAR growth, implying a little bit of a bump in the fourth quarter, which is certainly achievable. RevPAR has been growing for 67 months, and there seems to be no immediate end in sight.
RevPAR growth of 8% was of course a function of strong occupancy growth (+3.3%, the third strongest this year) and 4.6% average-daily-rate growth. But again, other than to convince Wall Street traders that the end of industry is not near, I’d not read too much into it.
Supply growth this month was 1.2% and will be firmly locked in above 1% from here on out.
2. Room demand increased by 4.6%
This was mostly expected because of the Labor Day shift. The number of rooms sold topped 100 million again (102 million to be exact). It was the fifth month in a row that the industry sold more than 100 million rooms, a record streak.
The average monthly number of rooms sold in 2015 is still more than 100 million.
In October 2014, the industry sold more than 104 million roomnights. The average increase of new room demand in June, July and September this year was about 4 million new roomnights, so let’s see if that pattern holds in October.
3. Chain-scale performance was mixed
Once again the lower-rated scales outperformed the high end.
Scale RevPAR % Change
Upper Upscale 3.9
Upper Midscale 8.4
Just like for the national numbers, RevPAR growth was driven by ADR. Economy hotels were able to increase room rates 6.3%, whereas upper-upscale hotels increased ADR by 2.4%.
One explanation is probably, again, due to Labor Day, drives leisure business. The lower-rated scales traditionally benefit from this.