STR: US hotel industry ends '09 with double-digit RevPAR drop

STR: US hotel industry ends '09 with double-digit RevPAR drop


22 January 2010 9:53 AM
By Rachael Spann
Communications Coordinator, STR
HotelNewsNow.com columnist



HENDERSONVILLE, Tennessee—Revenue per available room fell 16.7 percent to US$53.71 during 2009, according to year-end reports from Smith Travel Research.

The industry’s occupancy fell 8.7 percent to 55.1 percent for the year and average daily rate dropped 8.8 percent to US$97.51.

“Good riddance to 2009, a year which we believe will go down as the worst in the modern hotel industry,” said Mark Lomanno, president at STR. “The combination of a distressed economy in conjunction with panic pricing drove RevPARs down to levels that were virtually incomprehensible just a year and a half ago. I look for a significant improvement in the key hotel performance indicators in 2010.”

None of the Top 25 Markets reported year-end increases in any of the three key metrics.

Houston, Texas, ended the year with the largest occupancy decrease, falling 17.0 percent to 55.8 percent due to the lingering effects of Hurricane Ike.

New Orleans, Louisiana, was the only market to end the year with an ADR decrease of less than 5 percent, falling 4.0 percent to US$113.52. New York, New York, reported the largest ADR decrease, falling 21.8 percent to US$215.14.

New York also ended the year with the largest RevPAR decrease, down 26.3 percent to US$166.11, followed by Phoenix with a 25.3-percent decrease to US$55.36.



Source: STR

December 2009

During December 2009, the industry’s occupancy fell 1.9 percent to end the month at 44.2 percent in year-over-year measurements. ADR dropped 6.0 percent to finish the month at US$93.73. RevPAR for the month decreased 7.8 percent to finish at US$41.46.

“While we were encouraged by the positive demand performance the industry experienced in December, we believe this may be more the result of an easy comparison to last year and the timing of New Year’s Eve,” Lomanno said. “In the coming months, we hope to see similar results.”

Among the chain-scale segments, two segments ended the month with occupancy increases. The luxury segment rose 5.0 percent to 54.6 percent, and the upper-upscale segment was up 2.6 percent to 52.2 percent. The Upscale segment ended the month virtually flat in occupancy with a 0.1-percent decrease to 50.0 percent.

Among the top 25 markets, New Orleans led the increases in all three key metrics. The market’s occupancy rose 11.0 percent to 53.4 percent, ADR increased 16.4 percent to US$120.12, and RevPAR jumped 29.2 percent to US$64.10.

Aside from New Orleans, two markets experienced occupancy increases of more than 5 percent: Oahu Island, Hawaii (+7.1 percent to 72.5 percent), and Tampa-St. Petersburg, Florida (+5.4 percent to 47.1 percent). Houston posted the only double-digit occupancy decrease, falling 21.4 percent to 44.7 percent.

New Orleans was the only market to report an ADR increase. San Francisco/San Mateo, California, posted the largest ADR decrease, falling 17.4 percent to US$117.39, followed by Houston (-13.3 percent to US$81.73), Chicago, Illinois (-13.2 percent to US$99.01), and Phoenix (-13.1 percent to US$89.35).

Norfolk-Virginia Beach ended the month flat in RevPAR at US$23.99. Houston reported the largest decline in RevPAR, which fell 31.8 percent to US$36.50, followed by San Francisco/San Mateo with a 22.1-percent decrease to US$69.90.