Latest Statistics Reflect Hotel-Industry Slump
The economic downturn that began at the end of 2007 and continued throughout 2008 and into this year has had a noticeable negative impact on hotels from coast to coast.
The findings are based on more than 5,800 responses to the annual Hotel Operating Statistics Survey (HOST). This is the largest number of responses ever received by HOST, the most comprehensive database focusing on revenues and expenses of the U.S. hotel industry.
While the average daily rate for hotels reached a record high of $106.55 in 2008, pretax-Income profits for the year were down 7.9% to $25.8 billion. The decrease in room revenue during the last four months of 2008 was especially severe, and a major factor in a total profit loss for the year of $2.0 billion.
“The hotel industry was hit hard throughout 2008 by the decrease in leisure and business demand,” said Mark Lomanno, president of Smith Travel Research (STR). “Unfortunately we will continue to operate in an environment of declining demand for the foreseeable future, which will put additional pressures on room rates and profits. Despite the current situation, we have to remember that this is a cyclical industry, and we expect the situation to improve towards the end of 2009."
Here are some highlights of the study:
• Full-service hotels reported an average occupancy rate of 67.4% and average daily rate (ADR) of $164.31 in 2008, compared with an occupancy of 70% and ADR of $166.69 in 2007.
• The larger the full-service hotel, the better the occupancy. Full-service hotels with more than 500 rooms reported an occupancy rate of 71.3% compared with hotels of fewer than 150 rooms, which had 63.5%.
• Among limited-service hotels, the Mid-Atlantic region of the U.S. had the highest occupancy rate (72.3%) and the highest ADR ($147.50).
The HOST study contains, besides revenues and expenses, statistics on individual segments of the industry including rooms, food and beverage, marketing, utility costs, property and maintenance.
For more information and details about HOST, visit www.smithtravelresearch.com.
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