Hotel Statistics Still Grim

Highlights include Marriott International Inc. (MAR), Starwood Hotels & Resorts Worldwide, Inc. (HOT) and Intercontinental Hotels Group plc (IHG).

Smith Travel Research released weekly hotel operating statistics today, and the news remains grim. For the week ended March 28, occupancy fell 12.3% year-over-year to 56.6%, average daily room rate, or ADR, fell 8.8% to $99.77, and revenue per available room, or RevPAR, fell 20.0% to $56.50.

Looking inside the numbers, New York City posted the largest decrease in ADR, down 28.2%, and RevPAR, down 39.6%. As the city with by far the highest room rates in the country, this decline is not particularly surprising. However, NYC remains the most important hotel market in the country, and its ability to rebound once the economy improves will have a significant impact on the lodging sector.

Six markets posted weekly RevPAR declines of more than 25%:

Market Weekly RevPAR Change

New York, NY -39.6%
Orlando, FL -35.4%
Oahu Island, HI -26.8%
Miami, FL -26.8%
Minneapolis / St. Paul, MN -26.3%
Boston, MA -25.9%

We note that the list above is comprised of leisure destinations (Orlando, Oahu), business destinations (Minneapolis/St. Paul, Boston), and markets that are a mix of the two (New York City). Both consumers and business are scaling back travel expenditures amid the economic recession, and hotel companies continue to feel the impact.

RevPAR was down in all chain-scale segments, from Luxury down to Economy, as every area of the industry deals with the current lack of demand.

Lower-tier hotels, including Economy and Midscale brands, posted the largest declines in occupancy. Luxury brands posted the largest declines in ADR and RevPAR, as these hotels seek to cut prices to keep customers from trading down to cheaper brands.

Clearly, the operating environment for hotel companies, including Marriott (MAR), Starwood (HOT) and Intercontinental Hotels Group (IHG), remains exceedingly challenging, with no sign of improvement in the near future. 

Read the full analyst report on MAR

Read the full analyst report on HOT