Elliott Mest, Hotel Management
Read the story at www.hotelmanagement.com.
Major North American markets are seeing strong transient booking numbers from both individual business and leisure travelers. According to data from TravelClick's November 2015 North American Hospitality Review, North American hotels are also seeing an increase in average daily rates and solid revenue per available room growth.
Though the report found transient business is up, bookings are down 3.8 percent year-over-year.
"The recent increase in new transient reservation pace is welcomed news for hoteliers, especially coming within the final months of 2015," John Hach, TravelClick’s senior industry analyst, said in the report. "However, new business demand for the group segment is softening and has the potential to impact occupancy growth moving forward. It's vitally important for hoteliers to opportunistically invest in marketing over the upcoming months to recoup potential losses in group bookings. Consumers are constantly engaged and actively searching for hotels that promote added value inclusions like free breakfast, Wi-Fi and more. Hoteliers who understand this behavior and aggressively market their properties can safeguard RevPAR performance throughout periods of weakening demand."
The TravelClick report's outlook for the next 12 months (November 2015-October 2016) forecasts transient bookings to rise 2.2 percent year-over-year, while ADR is expected to rise 3.1 percent. The transient leisure segment is seeing the greatest gains, with occupancy up 4.9 percent and ADR up 3.1 percent. The transient business segment (negotiated and retail) is down -1.3 percent, while ADR is up 3.8 percent. Meanwhile, the group segment's occupancy is up 3.2 percent and ADR rose 3.9 percent compared to the same period last year.
For Q4 2015, TravelClick estimates ADR for all travel segments will rise 3.4 percent, RevPAR will increase 5.2 percent and reserved occupancy will be up 1.8 percent. For Q1 2016, the ADR for all travel segments will increase 6.9 percent while committed occupancy is only expected to increase 0.1 percent.
“Moving into 2016, committed occupancy is flat year-over-year, creating further dependency on average daily rate increases to sustain RevPAR performance," Hach said. "However, TravelClick data indicates that occupancy growth will pick up later into 2016. With solid business intelligence and a marketing plan to support the valleys and peaks in demand, hotels should still be able to grow rates in the near-term."
Strong activity from transient travelers further substantiates the industry's increased construction spending. Hotels have long tried to nail down to most effective means of securing transient guests, but recent investigations into customer booking habits have shown there is no clear winner between apps and browsers in the battle for travel attention. The good news is, according to the data from TravelClick, guests are using the avenues currently available to them to book on the fly.