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Fourth Quarter of 2017 Brings Brighter Outlook for North American Hoteliers

August 23, 2017 Hotel Trends No Comments Email Email

While North American hoteliers continue to experience inconsistent booking growth during the third quarter of 2017, the fourth quarter brings long-awaited, welcomed news: healthy growth in both average daily rates (ADR) and bookings across all travel segments, according to new data from TravelClick’s August 2017 North American Hospitality Review (NAHR).

Overall, ADR is up 0.8 percent and committed occupancy* is up 4.4 percent in the fourth quarter. Additionally, the group and transient segments show particularly strong gains in bookings, up 4.5 percent and 4.4 percent respectively. Transient leisure travel is the exception, with ADR slightly down -0.5 percent; however, bookings for this segment are up an impressive 6.4 percent.

“Heading into the final months of the year, the latest data is showing a positive shift that will break the ongoing trend of inconsistent booking growth that has loomed over most of 2017,” said John Hach, TravelClick’s senior industry analyst. “As a result, North American hoteliers now have viable opportunities to capture local demand and become less reliant on raising rates to increase revenue per available room (RevPAR).”

Twelve-Month Outlook (August 2017 – July 2018)

For the next 12 months (August 2017 – July 2018), transient bookings are up 1.8 percent year-over-year, and ADR for this segment is slightly up 0.5 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is up 4.1 percent, and ADR is flat at 0.0 percent. The transient business (negotiated and retail) segment is down -1.4 percent; however, ADR is up 1.4 percent. Lastly, group bookings are up 1.2 percent in committed room nights over the same time last year, and ADR is up 1.5 percent.

“The upswing in fourth quarter bookings brings a refreshing wave of much-needed optimism for hoteliers,” added Hach. “This is an opportune time to place greater emphasis on acquiring and converting new guests, especially through the higher ADR Direct and GDS channels.”

The August NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by August 1, 2017, for the period of August 2017 to July 2018.

*Committed Occupancy – (Transient rooms reserved + group rooms committed) / capacity

The third quarter combines historical data (July) and forward-looking data (August – September).

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