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August 11, 2016

Despite strong financials, hotels are likely to face more challenges in the months ahead, according to hotel consultancy TravelClick, which yesterday published the results of its July 2016 North American Hospitality Review.

Although the average daily rate at North American hotels is up 2 percent over the same time last year, TravelClick reported, the pace of new bookings is down.

"As new July bookings [overall] have fallen by 3.6 percent compared to the same time last year, it's becoming abundantly clear that there are stronger headwinds ahead for hoteliers in 2016," said John Hach, TravelClick's senior industry analyst. "However, year-over-year growth is still occurring, stemming from committed reservations that were generated throughout the first and second quarters."

According to TravelClick, individual business traveler bookings for the next 12 months have fallen 4 percent in the last 30 days, although ADR is up 2.8 percent. For the group sector, meanwhile, bookings are up 6.1 percent and ADR 3.2 percent.  

"Heading into the third and fourth quarter of 2016, the new reservation pace decline is occurring at a time when there is growing concern of infectious disease and terrorism that have the potential to further erode travel demand," continued Hach. "The weakening new group booking pace also places additional pressure on obtaining revenue per available room performance from the transient channels, where discounting is becoming more and more prevalent. As a result, it's imperative that hoteliers take proactive measures to maximize their online presence to consumers and travel agents alike, especially as the peak summer travel season begins to fade."