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April 4, 2003 – Hotel Performance – Up or Down?

The second week of the Iraq War, ending March 29, has brought some surprisingly optimistic results for the hotel industry. Smith Travel Research reports that on a national level, occupancy rates increased by 1.2 percent over the same period last year. Average daily room rates (ADR) increased by 2.1 percent and revenue per available room (RevPAR) grew 3.2 percent from last year. Occupancy rates at upper upscale and upper class hotels surged ahead of last year by 8.9 percent and 8.1 percent respectively, and these two sectors had the best performance in terms of RevPAR also. However, upon closer scrutiny, these results are not as surprising as first thought. The equivalent week for 2002 was Easter week, a time when, traditionally, people stay at home with their families and so hotel occupancy rates, along with other measures, would have been typically lower. Therefore, a comparison to the week ending March 31, 2001 will give a better gauge of the current situation. Compared to 2001, occupancy rates fell 9.4 percent while average daily room rates dropped by 4.0 percent. RevPAR plummeted 13.0 percent in comparison to 2001 numbers.

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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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