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STR: US, EMEA hotel performance for July 2014

Overall, in year-over-year results, the U.S. hotel industry’s occupancy was up 3.9 percent to 73.6 percent; its average daily rate rose 4.8 percent to US$117.81; and its revenue per available room increased 8.8 percent to US$86.71.

The U.S. hotel industry reported positive results in the three key performance metrics during July 2014, according to data from STR.

Overall, in year-over-year results, the U.S. hotel industry’s occupancy was up 3.9 percent to 73.6 percent; its average daily rate rose 4.8 percent to US$117.81; and its revenue per available room increased 8.8 percent to US$86.71.

“Hotels in July saw the strongest demand of a single month ever, selling 113 million roomnights,” said Jan Freitag, senior VP of strategic development at STR. “RevPAR saw the second-highest growth rate of the year (+8.8 percent), trailing May’s increase of 10.0 percent. Absolute occupancy this month was 73.6 percent, the third highest ever, and the highest since the mid-90s.

“When the industry sells on average over seven out of 10 rooms each and every night that can only mean one thing: pricing power,” Freitag said. “Room rates increased 4.8 percent over last year, and given the strong demand fundamentals there really is no end in sight to the prolonged pricing opportunities revenue managers are experiencing.”

Thirteen of the Top 25 Markets reported double-digit RevPAR growth, led by Minneapolis/St. Paul, Minnesota-Wisconsin, with a gain of 19.5 percent to US$94.17. Denver, Colorado, followed with a RevPAR increase of 19.3 percent to US$106.89.

Atlanta, Georgia, reported the highest occupancy increase for the month, rising 7.9 percent to 76.3 percent, followed by Minneapolis/St. Paul (+7.3 percent to 80.0 percent). Anaheim/Santa Ana, California, reported the largest occupancy decrease, falling 2.0 percent to 87.3 percent.

Seven of the Top 25 Markets reported double-digit ADR increases. Seattle, Washington, recorded the highest ADR growth, rising 13.5 percent to US$160.65. Denver followed with a 13.2-percent increase to US$120.17.

None of the Top 25 Markets recorded an ADR or RevPAR decrease during the month.

Europe hotel results
The European hotel industry posted mixed results in year-over-year metrics when reported in U.S. dollars, Euros and British pounds for July 2014. “Europe’s supply increased 0.9 percent, on a 12-month-moving-average basis, while demand is increasing at a healthy 3.2 percent”, said Elizabeth Winkle, managing director of STR Global. “As a result, the region is achieving occupancy levels of 68.2 percent. In July 2014, Europe demand was over 100 million rooms sold for the second month this year.

“It’s is reassuring to see Athens improving from not only an occupancy perspective (+21.9 percent) but also from a RevPAR perspective (+32.1 percent) in year-to-date results”, said Winkle. “Glasgow, host of the 2014 Commonwealth Games from 23 July through 3 August, greatly benefited from the games evidenced by strong performance increases across the board. The market’s occupancy for July was 87.5 percent, as its ADR jumped by +58.9 percent and RevPAR increased by 73.5 percent”.

Highlights from key market performers for July 2014 include (year-over-year comparisons, all currency in Euros):

  • Lisbon, Portugal, rose 15.4 percent in occupancy to 81.5 percent, reporting the largest increase in that metric. Athens, Greece, followed with a 14.0-percent increase to 77.6 percent.
  • Tel Aviv, Israel, fell 33.0 percent to 52.1 percent in occupancy, posting the largest decrease in that metric. The market also reported the largest RevPAR decrease, falling 35.0 percent to EUR94.69.
  • Four markets achieved ADR growth of more than 15.0 percent: Manchester, England (+18.5 percent to EUR83.50); Copenhagen, Denmark (+17.7 percent to EUR116.54); Tallinn, Estonia (+16.7 percent to EUR85.09); and Athens (+15.1 percent to EUR111.43).
  • Moscow, Russia (-11.9 percent to EUR102.44), and Vilnius, Lithuania (-11.7 percent to EUR52.70), reported the largest ADR decreases during July.
  • Four markets experienced RevPAR increases of more than 15.0 percent: Athens (+31.2 percent to EUR86.43); Manchester (+22.7 percent to EUR67.79); Copenhagen (+20.9 percent to EUR96.50); and Frankfurt (+17.5 percent to EUR65.87).

Middle East/Africa results
The Middle East/Africa region reported positive performance during July 2014 when reported in U.S. dollars. In July the region reported a 0.9-percent increase in occupancy to 49.3 percent, a 6.9-percent increase in average daily rate to US$156.54 and a 7.9-percent increase in revenue per available room to US$77.15.

“On a 12-month-moving-average basis, supply and demand growth are on par at 2.8 percent, which means occupancy growth is flat, at 61.4 percent”, said Elizabeth Winkle. “Ramadan occurred entirely in July which resulted in lower than usual levels of demand in what is typically the region’s weakest month of the year. The confluence of these factors resulted in lower than average performance for the month. We view this as an anomaly and would expect performance to improve in August.

“In Makkah and Medina, where the two holy cities typically welcome an influx of travellers during this time, we saw occupancy growth well over 20.0 percent for both markets in July. Makkah also saw a strong ADR increase, up 23.1 percent in July”, Winkle said.

Highlights among the Middle East/Africa region’s key markets for July 2014 include (year-over-year comparisons, all currency in U.S. dollars):

  • Cairo, Egypt (+73.9 percent to 29.3 percent), and Cape Town, South Africa (+15.8 percent to 52.4 percent), reported the largest occupancy increases.
  • Amman, Jordan, fell 20.2 percent in occupancy to 34.4 percent, reporting the largest decrease in that metric. Nairobi, Kenya, followed with a 16.0-percent decrease to 55.3 percent.
  • Jeddah, Saudi Arabia, increased 12.5 percent in ADR to US$286.28, achieving the only double-digit increase in that metric.
  • Nairobi (-5.4 percent to US$141.62) and Riyadh, Saudi Arabia (-4.8 percent to US$207.05) posted the largest ADR decreases.
  • Three markets experienced RevPAR growth of more than 15.0 percent: Cairo (+82.6 percent to US$30.57); Manama, Bahrain (+20.1 percent to US$72.94); and Cape Town (+15.4 percent to US$49.76).
  • Amman fell 21.4 percent in RevPAR to US$54.86, posting the largest decrease in that metric. Nairobi followed with a 20.5-percent decrease to US$78.29.

 


Photo caption: Best Western PLUS Sand Rose Suite Hotel.

 

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