American Hotels Hit Multiple Historic Milestones In June
Hotel performance this year reflects the long, ongoing recovery of the American economy following the Great Recession.
In June American hotels saw an overall increase in RevPAR for the 100th consecutive month, according to research agency STR.
This represents the longest streak of successive revenue per available room growth in the recorded history of the industry, and the second-longest growth period behind the time frame of December 1991 to March 2001, which lasted 112 months.
“As the country came out of the recession, the industry as a whole was in a great position with improved economic conditions, accelerated spending in both the leisure and business travel sectors and a negligible increase in room inventory,” STR President and CEO Amanda Hite said in a statement. “In fact, that lack of significant supply growth coupled with consistently high demand has enabled hoteliers to continue to push occupancy and room rates beyond peak levels."
Based on 12-month moving averages, each main performance metric hit an all-time high in June:
- RevPAR reached $84.98.
- Occupancy hit 66%.
- Average daily room rates stood at $128.27.
STR estimates that 117 million room nights were sold across all markets it tracks, an all-time June record. Hite said that STR expects the growth to continue.
Orlando led all markets in terms of year-over-year growth across all key performance indicators. Houston had the second-biggest jumps in RevPAR and occupancy, while Miami posted the second-biggest increase in average daily rates.
New Orleans was the only market tracked that saw a year-over-year drop in average room rates, and one of two that experienced a decline in RevPAR.
As all these indicators trend upward, hotel landlords and operators are still facing increasing pressure on expenditures, resulting in thinning profit margins.
Despite that pressure, an inundation of new supply is on the way. Those factors could be responsible for the slow investment market and decreasing prices in hotel transactions this year.
Among those individual transactions have been a number of portfolio deals and company acquisitions, most notably Blackstone's acquisition of LaSalle Hotels.
