May
13

Smith Travel Research Reports 1st Quarter Lodging Statistics

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This a portion of the just released Smith Travel Research Lodging Review for the 1st quarter 2008.

Total U.S. room occupancy in the first three months of 2008 was 57.8 percent, nearly 3 percent below the same period last year and the lowest for the quarter since 2004. The number of rooms sold (demand) dropped .6 percent from a year ago while supply rose more than 2 percent. The increase of less than 2 percent in revenue per room (RevPAR) was due entirely to the higher average room rate. The industry was hit with several unfavorable factors during the first quarter. The Easter holidays, during which travel is curtailed, fell in March this year and in April a year ago. Severe weather in the Midwest and airline maintenance problems also affected travel as thousands of flights were cancelled. Consumer confidence, which affects leisure travel, took a nosedive as a result of the continued high cost of gasoline, the depressed housing market and the faltering economy. We analyzed the TRENDS by quarter for the past 10 years and discuss the results in detail in the special analysis that follows these introductory comments. Some highlights of the performance of the lodging industry in the first quarter of 2008 are as follows:

The average room rate increased by nearly 5 percent to $107.93, the highest we have reported. The rate change was the third highest in the last ten years.

Room occupancy in the Top 25 Markets was 64.7 percent, a decrease of more than 2 percent from the same period a year ago. Room demand dropped 1 percent while the number of available rooms rose almost 2 percent. In All Other Markets occupancy dropped nearly 3 percent as the slight decrease in demand (.4 percent) was further aggravated by a rise of more than 2 percent in the number of available rooms.

Based on market share of supply, those markets that cater to both business and leisure travelers provided more than 85 percent of the decrease in the national number of rooms sold while those properties in the Resort markets made up the balance. The Commercial markets reported a slight improvement compared to the first quarter of 2007.

There were increases in demand in the first quarter in hotels in only the New England, Middle Atlantic and West South Central regions. The most severe drop was nearly 2 percent in the South Atlantic region. The lower-priced properties reported drops in demand as did those in almost all locations. The largest increase was nearly 3 percent in hotels in New England, apparently in the higher-priced hotels and in Small Metro/Town locations, indicating a fairly good ski season.

BLOG NOTE:

The Smith Travel Research reports are the industry standard for lodging analysis. Integra Realty Resources – South Carolina subscribes to their full reports in order to have the best data possible for appraisal and consulting assignments.

MBD

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