US hotels sell a record 430 million room nights this year

Posted on: June 20 2012 | Posted in: Latest News
"...During this year's summer months travelers can expect fuller hotels..."


By Barbara De Lollis, USA TODAY


Hotel Check-In has invited hotel analyst Jan D. Freitag, a senior vice president at hotel industry tracker STR, to give us the scoop on hotel rates once a quarter. He'll look at U.S. room rates by hotel segment. STR provides hotel operators, developers, financiers and other clients hotel data, including forecasts. Freitag in his own words:

The U.S. hotel industry is currently going through resurgence.

In the first five months of 2012, U.S. hotels sold some 430 million room nights - that's more rooms than in any five-month period before.

Combine this with limited new additions to the hotel supply and the outcomes are higher occupancy levels across all segments. This is good news for the industry and for hotel operators since this should translate to pricing power after years of discounting.

Expect rates to "inch higher"

Of course, the outcome for travelers is that room rates will inch higher in the coming months and quarters. Most analysts, including our firm, expect that the average daily room rate for U.S. hotels in 2012 will grow around 4% over 2011.

So far this year, room rates across all segments have increased by roughly this amount as the following table shows:

Room rate by hotel segment, first 5 months 2012 vs 2011

2011 2012 PERCENT INCREASE



LUXURY $260.84 $273.53 4.9%

FULL SERVICE $129.02 $134.24 4.1%

LIMITED SERVICE $84.24 $87.54 3.9%

ECONOMY $48.07 $50.14 4.3%

Luxury hotels lead industry's recovery

Luxury hotels, with their wide variety of amenities and superb locations, currently command a rate premium of around $140 over the standard full service hotels.

On the other side of the spectrum, an average room in an economy hotel can still be had for around $50 per night. These dollar values are obviously averages, so expect your rates to vary widely.

During this year's summer months travelers can expect fuller hotels and restaurants as the American public takes to the roads and airports after years of scaling back their leisure travels.

While room rate increases are here to stay, we expect that they will not diminish the demand for hotel rooms. The good news is that a large number of hotels are in the process of renovating and adding new amenities to welcome new and repeat guests, alike.