June 17 2013 | Latest News"New Orleans among the top eight in RevPar increases."
June 17, 2013
The U.S. hotel industry reported increases in all three key performance metrics during the first quarter of 2013 in year-over-year measurements, according to data from STR.
The industry’s occupancy increased 1.8 percent to 57.7 percent, its average daily rate rose 4.5 percent to US$108.31 and its revenue per available room was up 6.4 percent to US$62.47.
“The industry realized nearly 3.0-percent growth in demand as a record 250 million room nights were sold during the first quarter of 2013,” said Brad Garner, COO at STR. “RevPAR increased 6.4 percent, lifted by a solid 4.5-percent gain in ADR. Most impressively, the industry posted meaningful results despite a difficult Easter comparable, stubbornly low group demand and generally tougher demand comparables.
“We continue to be bullish on industry-wide performance in 2013. However, we will continue to monitor the potency of the sequester and air traffic controller furloughs and their impact on industry results,” Garner commented.
Among the Top 25 Markets, Dallas, Texas, rose 7.1 percent in occupancy to 63.6 percent, reporting the largest increase in that metric. New York, New York, followed with a 6.8-percent increase in occupancy to 78.2 percent. Norfolk-Virginia Beach, Virginia (-1.9 percent to 43.2 percent), and Philadelphia, Pennsylvania-New Jersey (-1.6 percent to 58.0 percent), posted the largest occupancy decreases.
Oahu Island, Hawaii (+18.3 percent to US$208.77), and Miami-Hialeah, Florida (+12.2 percent to US$223.71) achieved the only double-digit ADR increases for the quarter. None of the top markets experienced ADR decreases during the first quarter.
Eight markets experienced double-digit RevPAR increases: Oahu Island (+18.4 percent to US$180.05); Miami-Hialeah (+16.7 percent to US$192.38); New York (+12.9 percent to US$164.63); Houston, Texas (+12.6 percent to US$70.88); Dallas (+11.3 percent to US$58.65); New Orleans (+11.3 percent to US$113.18); Anaheim-Santa Ana, California (+10.5 percent to US$87.44); and Nashville, Tennessee (+10.0 percent to US$63.03). Philadelphia reported the only RevPAR decrease, falling 0.5 percent to US$66.24.
$10 billion in new hotel projects opened in 2012â€¨Approximately $10 billion in new hotels opened in the U.S. during 2012, according to the debut issue of Hotel Development Almanac, a report from STR Analytics. While hotel industry fundamentals continued to improve in 2012, new developments are near their lowest level in the current cycle with only 420 hotels opening last year.
“With a limited amount of financing available for new developments, the volume of new rooms entering the market is negligible in most cities,” said Steve Hennis, director at STR Analytics. “However, with continued improvement in both the general hotel industry as well as the national economy, we are beginning to see the pace of new construction increase.”
Hennis noted more than 600 new hotels are slated to open in 2013.
Key findings from the 2013 Hotel Development Almanac:
- The average cost to develop a new hotel project in 2012 was $164,000 per room.
- The majority of new hotels are in the Upscale and Upper Midscale segments, which accounted for approximately two-thirds of 2012 openings.
- The most active market tract for development in 2012 was North Dakota, which saw 23 new hotels open.
- The New York City market had the costliest developments last year, averaging $508,000 per room.
- Hampton Inn & Suites and Holiday Inn Express had the most U.S. hotel openings in 2012.
STR Analytics also introduced a new metric to assist with the evaluation of hotel projects. The Hotel Development Index is a ratio of the average sale price per key from the STR Analytics’ Hotel Transaction Almanac and the average development cost per key. This metric provides a snapshot of the potential risk for a new project based on location, property class, region and chain scale. A high Hotel Development Index indicates a lower perceived project risk.
The Hotel Development Almanac is an overview of historical trends in U.S. hotel projects and their development costs. It includes a complete list of all hotels that opened in 2012 as well as aggregate breakdowns by region, property class and location type for numerous key metrics. The Hotel Development Almanac combines information from STR’s Census and Pipeline databases to create a comprehensive hotel development report. The Hotel Development Almanac is produced on an annual basis.