by Michael J. Shapiro | January 28, 2016
Group bookings have significantly increased over the past month, according to TravelClick's January 2016 North American Hospitality Review. That surge is in part counteracting lackluster business-transient reservations.
"Business demand pace has slowed, creating greater dependency on hoteliers to offset the slowing pace with discounted leisure and promotional bookings," explained John Hach, TravelClick's senior industry analyst. "As a result, hoteliers must ensure that they are measuring and monitoring local advance-booking trends across all channels to reach their 2016 revenue-per-available-room objectives."

The latest forecast from PricewaterhouseCoopers calls for a 5.5 percent RevPAR increase this year, despite some economic concerns and lackluster hotel performance in the fourth quarter of 2015. PwC predicts average daily rates will rise by 5.2 percent in 2016, although, the forecast notes, hoteliers currently are struggling to raise rates by any significant amount. Occupancy continues to rise, at the highest rate of increase since 1981. The forecast predicts hotels will average 65.7 percent occupancy this year.

TravelClick, which tracks committed occupancy, notes that group bookings for the next 12 months are up 3.5 percent in terms of committed room nights over the same time last year, and that group ADR is 4.7 percent higher. Transient bookings are up 2 percent overall for the next 12 months, with an accompanying 4.6 percent rise in ADR. But much of that demand is being driven by transient leisure; negotiated and retail transient-business bookings are down 3.6 percent thus far. Despite that, ADR in the transient business segment actually IS up by 5.2 percent.

Group bookings are particularly strong for the second quarter, with a 5 percent increase over this time last year in committed occupancy and a 4.8 percent higher ADR. "The dispersion of the newly added group bookings will continue throughout the new year," added TravelClick's Hech, "providing a viable foundation of advance reservation business. This bodes well for hoteliers to continue their focus on increasing ADR in 2016."