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Weakening reservation pace continues into final Summer months in North America

New August bookings indicate prolonged decline in North American markets.

NEW YORK – Heading into the latter summer months, the pace of new bookings continues to decline, with new August reservation commitments falling -2.8 percent. However, committed occupancy* and average daily rates (ADR) for the fourth quarter of 2016 are showing signs of growth for both group and transient travel, according to new data from TravelClick’s August 2016 North American Hospitality Review (NAHR). 

“We’re beginning to see an emerging trend with prolonged weakness in new reservation commitments,” said John Hach, TravelClick’s senior industry analyst. “The current slowdown began in June 2016 and is continuing well into August. While overall year-over-year variances remain positive, there is notable deceleration within the group and weekday transient negotiated segments that carry the risk of lower revenue per available room (RevPAR) performance in the third quarter of 2016.”

Twelve-Month Outlook (August 2016 – July 2017) 
For the next 12 months (August 2016 – July 2017), transient bookings are up 3.5 percent year-over-year, and ADR for this segment is slightly up 1.7 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is showing occupancy gains of 5.3 percent, with ADR gains of 2.0 percent. The transient business (negotiated and retail) segment is nearly flat, down -0.6 percent, but ADR is up 2.0 percent. Lastly, group bookings are up 5.2 percent in committed room nights over the same time last year, and ADR is up 3.1 percent. 

“Given the current environment in the third quarter of 2016, hoteliers must take proactive measures to promote their businesses and creatively differentiate their properties – all the while resisting the temptation to immediately lower rates,” added Hach. “There is still viable transient leisure demand occurring, and hoteliers must find ways to successfully compete in the market, especially through the upcoming months into the fourth quarter of 2016.”

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, 2016, from the period of August 2016 to July 2017. 

*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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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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