STR reports U.S. hotel performance for year-end 2008 and December 2008

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STR reports U.S. hotel performance for year-end 2008 and December 2008

Jan 30, 09 | 1:52 am

The U.S. hotel industry finished 2008 with a 60.4-percent occupancy rate, an average daily rate of US$106.55 and revenue per available room of US$64.37, according to data released from STR.

The occupancy rate was 4.2 percent lower than industry-wide occupancy at the end of 2007 (63.1 percent), while ADR was 2.4 percent higher than 2007 (US$104.04), and RevPAR was 1.9 percent lower than 2007 (US$65.61).

"After a reasonably good start to 2008, the industry fell into an extremely negative pattern during the last four months of the year," said Mark Lomanno, STR's president. "The data during the last quarter of 2008 experienced a dramatic decrease, and that led to the disappointing year-end numbers."

Lomanno said the company doesn't expect things to get better any time soon. "If we didn't hit bottom during the last quarter of 2008, we came pretty close to it," he said. "We expect the industry to bounce along at these levels for the next few months. Our expectations are that the industry should begin experiencing some relief in the second half of 2009 as the year-over-year comparisons get much better after the awful 2008 results."

Year-end 2008 data for individual chain-scale segments include (all currency figures in U.S. dollars):

	2008 OCC	2007 OCC	% change	2008 ADR	2007 ADR	% change	2008 RevPAR	2007 RevPAR	% change
Luxury	67.9%	71.5%	-5.1%	$288.63	$288.79	-0.1%	$195.87	$206.54	-5.2%
Upper Upscale	68.7%	71.2%	-3.6%	$159.85	$157.81	+1.3%	$109.75	$112.36	-2.3%
Upscale	66.8%	69.2%	-3.5%	$119.82	$118.50	+1.1%	$80.09	$82.05	-2.4%
Midscale w/ F&B	55.8%	59.0%	-5.5%	$88.26	$85.63	+3.1%	$49.23	$50.52	-2.6%
Midscale w/o F&B	62.3%	65.4%	-4.8%	$90.19	$87.20	+3.4%	$56.16	$57.02	-1.5%
Economy	54.4%	56.9%	-4.4%	$54.32	$53.78	+1.0%	$29.55	$30.62	-3.5%
Indepen- dents	58.6%	61.2%	-4.2%	$104.51	$101.58	+2.9%	$61.27	$62.14	-1.4%
Total U.S.	60.4%	63.1%	-4.2%	$106.55	$104.04	+2.4%	$64.37	$65.61	-1.9%

For the year, only two of the Top 25 markets posted occupancy gains: New Orleans, Louisiana (+8.6 percent) and Houston, Texas (+2.6 percent). Meanwhile, Phoenix, Arizona (-11.2 percent), Norfolk-Virginia Beach, Virginia (-8.7 percent) and Tampa-St. Petersburg, Florida (-7.2 percent) suffered the largest occupancy declines among the Top 25 markets.

All of the Top 25 markets had positive movement in ADR. Leading the way was Houston (+9.4 percent), Denver, Colorado (+6.3 percent), San Francisco-San Mateo, California (+5.4 percent) and Nashville, Tennessee (+5.0 percent). The markets' performances in RevPAR were varied. Top RevPAR gainers: Houston (+12.2 percent) and New Orleans (+10.1 percent). Phoenix (-8.3 percent) and Norfolk-Virginia Beach (-8.1 percent) had the largest RevPAR declines among the Top 25 markets.

December 2008 performance

During December 2008, the U.S. hotel industry saw year-over-year decreases in occupancy (-6.8 percent from December 2007 to finish the month at 45.3 percent), ADR (-3.2 percent from December 2007 to finish the month at US$99.42) and RevPAR (-9.7 percent from December 2007 to finish the month at US$44.99).

Luxury hotels were hit the hardest during the month, as the segment's year-over-year occupancy dropped 11.5 percent to 52.1 percent, its ADR fell 7.3 percent to US$294.40, and its RevPAR declined 17.9 percent to US$153.41. However, each of the individual chain scales declined in nearly all three major measurement categories; the exception was the Midscale-without-Food-and-Beverage segment's flat (0.0) performance in ADR.

Houston (+8.5 percent to 57.3 percent), Orlando, Florida (+1.2 percent to 61.3 percent) and San Francisco-San Mateo (+0.3 percent to 62.7 percent) were the only markets among the Top 25 markets that had occupancy gains. Phoenix (-16.4 percent to 43.9 percent), San Diego, California (-11.9 percent to 47.9 percent) and Atlanta, Georgia (-11.3 percent to 43.7 percent) suffered the largest year-over-year occupancy drops.

San Francisco-San Mateo (+7.7 percent to US$142.51), Houston (+6.8 percent to US$94.03), Washington, D.C. (+0.3 percent to US$135.78) and Chicago, Illinois (+0.2 percent to US$113.46) were the only markets among the Top 25 markets that achieved ADR growth. New York, New York (-10.0 percent to US$297.15), Atlanta (-9.5 percent to US$79.85) and Oahu Island, Hawaii (-7.4 percent to US$171.56) had the largest drop-offs in ADR among the Top 25 markets.

In the RevPAR category, Houston (+15.9 percent to $US53.86) and San Francisco-San Mateo (+8.0 percent to US$89.33) were the only two Top 25 markets to achieve growth. Phoenix (-21.0 percent to US$45.16), Atlanta (-19.7 percent to US$34.92) and Detroit, Michigan (-16.4 percent to US$31.52) suffered the largest year-over-year RevPAR setbacks during December.

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For more than 20 years, Smith Travel Research has been the recognized leader for lodging industry benchmarking and research. Smith Travel Research and STR Global offer monthly, weekly, and daily STAR benchmarking reports to more than 36,000 hotel clients, representing nearly 5 million rooms worldwide. STR is headquartered in Hendersonville, Tennessee, and STR Global is based in London. For more information, visit www.strglobal.com.