Hotel & Motel Management - November 5, 2007 - (Page 28)

28 Trends & Stats H&MM November 5, 2007 | HotelMotel.com www.HotelMotel.com/digital_edition Top markets have signiﬁcant inﬂuence on lodging industry IN THE details Large-market numbers up Expect room supply growth Occupancy, ADR well above average RevPAR up in large markets Key 15 Markets — Room supply percent change — August 2007 YTD New York Boston Orlando Total U.S. San Diego Washington Anaheim, Calif. Dallas Oahu, Hawaii Chicago Houston San Francisco Phoenix Los Angeles Atlanta Miami 2.0 2.0 1.8 1.2 1.1 1.0 0.9 0.9 0.8 0.3 0.3 0.0 -0.4 -0.6 -0.9 -3.0 By Bobby Bowers H&MM Columnist t Smith Travel Research, we’re frequently asked about the inﬂuence of large markets on total U.S. lodging industry performance. To help answer the question, we analyzed hotel operating performance in the largest 15 U.S. markets (based on annual room revenue; excludes Las Vegas). Not surprisingly, the inﬂuence of these markets on total industry numbers is signiﬁcant. With more than 7,400 hotels and more than 1 million rooms, the top 15 markets account for about 23 percent of U.S. industry room supply. Predictably, the markets capture more than their fair share of industry rooms sold (25 percent) and room revenue (34 percent). Room supply growth was 0.4 percent in the top 15 markets, based on the 12month data ending August 2007, which was signiﬁcantly below total U.S. industry growth. Supply increases in all other markets outside the top 15 were 1.3 percent. Only three of the top markets experienced August year-to-date supply growth greater than the U.S. average. Higher barriers to entry and construction costs tend to constrain supply growth in many larger markets. With just less than 62,000 rooms currently under construc- A tion in the top 15 U.S. markets, or about one-third of the U.S. total, we can expect higher room supply growth in the near future. On the demand (rooms sold) front, ﬁve of the top 15 markets experienced growth above the U.S. average of 1.3 percent, based on August year to date numbers. August YTD demand increased 0.5 percent in the top markets while gaining 1.6 percent in all other markets. August YTD occupancy rates were very strong in the largest markets. Only Dallas was below the U.S. average of 65.1 percent, while nine of the top 15 enjoyed occupancies of 70 percent or higher. August YTD occupancy in the largest 15 markets was just over 70 percent, which makes it even with the prior year and nearly nine percentage points higher than all other U.S. markets. Seven of the top 15 markets experienced occupancy declines. Average daily rate growth in the top markets also has been strong. August YTD room rates increased 7.2 percent in the top 15; all other markets experienced ADR growth of 5.2 percent. Nine of the top markets enjoyed room rate increases higher than the U.S. average. ADR in the top 15 markets was just over $134–a $40 premium over all other markets. Revenue per available room growth YTD, which was more than 7 percent in the top 15 markets, has been driven primarily by ADR increases. This trend likely will continue through the balance of 2007 and into 2008. Is bigger better? If ADR and RevPAR growth is the yardstick, the answer is a resounding, “Yes!” hmm@questex.com Bobby Bowers is senior v.p., operations of Hendersonville, Tenn.-based Smith Travel Research. -4 -2 0 2 Key 15 Markets — Room demand percent change — August 2007 YTD New York San Francisco Houston Boston Washington Total U.S. Chicago Anaheim, Calif. Orlando San Diego Dallas Los Angeles Phoenix Atlanta Miami Oahu, Hawaii 4.0 2.9 2.8 2.3 1.6 1.3 1.3 1.2 0.9 -0.1 -0.4 -0.9 -1.0 -2.3 -2.5 -7.2 -10 -5 0 5 Key 15 Markets — RevPAR percent change — August 2007 YTD New York Houston San Francisco Miami Anaheim, Calif. Chicago Los Angeles Phoenix Dallas Total U.S. Boston San Diego Washington Orlando Atlanta Oahu, Hawaii 13.2 10.0 9.6 9.5 8.7 7.1 6.6 6.4 5.8 5.8 5.4 5.2 5.2 3.8 2.0 -1.6 -6 -1 4 9 14 Key 15 Markets — ADR percent change — August 2007 YTD New York Miami Anaheim, Calif. Houston Dallas Phoenix Oahu, Hawaii Los Angeles San Francisco San Diego Chicago Total U.S. Boston Orlando Washington Atlanta 11.0 8.9 8.3 7.4 7.2 7.2 6.9 6.9 6.5 6.5 6.1 5.7 5.1 4.7 4.5 3.4 Key 15 Markets — Occupancy percent — August 2007 YTD New York Oahu, Hawaii Los Angeles San Diego Anaheim, Calif. San Francisco Miami Orlando Washington Phoenix Chicago Boston Houston Atlanta Total U.S. Dallas 82.8 77.7 76.9 75.7 75.6 74.8 74.2 71.9 70.8 69.4 68.3 67.9 67.9 65.7 65.1 62.2 0 4 8 12 50 60 70 80 90 © 2007 Smith Travel Research http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition

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Hotel & Motel Management - November 5, 2007 Contents M&A Pace Slowing After Early Boom LodgeWorks Jumps Into Upscale Game Accor Reorganizes Leadership, Structure Perspective At Your Risk Travel Trends Sales Clinic On Finance Family Business Matters Cornell Insights Franchise Law Training Trends Satisfaction Trends Management Trends Events Guest Column Trends & Stats GM Survey Historic Property Conversions Offer Appeal for All Extended-Stay Brands Survey Green is the Word at IH/M&R Show Transactions Restaurant POS Handhelds Keep Managers Alerted Rising Costs Confront Midwest Builders Business Travelers: Breakfast Still an Important Perk IH/M&RS Product Preview Vacation Ownership Projects to Grow in U.S., Abroad Awards Training Programs Jump to Front Lines Refrigeration: Before You Break It, Fix It Lighting Enhances Property People Supplier News Best Western Aims High with Atria Vantage Makes Global Plans Sierra Moves Forward with New Name, High Expectations Maintenance Doctor Social Marketing Makes Way into Hotel Industry People Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - November 5, 2007

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