On Monday, at the Americas Lodging Investment Summit (ALIS) Deloitte & Touche and Smith Travel Research shared the platform to reveal…
On Monday, at the Americas Lodging Investment Summit (ALIS) Deloitte & Touche and Smith Travel Research shared the platform to reveal year-end performance data for the global hotel industry. US data was presented by Randy Smith, CEO of Smith Travel Research, whilst international data was presented by Marvin Rust, partner for HotelBenchmark at Deloitte & Touche.
The data reveals that whilst US hotels experienced a decline in revPAR of 2.5% during 2002, hotels across the rest of the world reported positive growth in revPAR compared to 2001 when measured in US dollars. The best performing region was Asia Pacific where revPAR increased by 3.8%, followed closely by Europe where revPAR rose 3.4%. RevPAR increased by just 0.4% in the Middle East. Part of the reason for the impressive performance of these regions is linked to the relative weakness of the US dollar against other global currencies, in particular the euro. When measured in euros, revPAR actually fell across Europe by 3.5%.
Widely differing pricing tactics have emerged across the various regions. In the US, both occupancy and average room rate came under pressure with hotels reporting a 1.0% fall in occupancy combined with a 1.5% decline in average room rate. In Europe however, the 1.7% drop in occupancy was compensated for by a 5.3% improvement in average room rate. Across Asia Pacific average room rates held stable and growth was achieved through a 3.7% increase in demand. In order alleviate some fears that consumers may have had about travelling to the Middle East, hotels in that region discounted their average room rates by 4.6%. This helped boost demand by 5.2% over 2001 levels.
Marvin Rust, partner for HotelBenchmark at Deloitte & Touche said: We are encouraged by the positive signs that the international hotel industry may have reached the bottom of the cycle, and absent of a protracted confrontation in Iraq, we are cautiously optimistic about the prospects for the industry in 2003.
Commenting on the outlook for the US market, Randy Smith, CEO Smith Travel Research added: Assuming the current economic and political environment remains fairly stable, room demand should gradually improve and when combined with low supply growth, both occupancy and room rates should show modest improvement in 2003.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
