North American Hotel Rates Remain Steady While Bookings Drop

Average daily hotel rates are holding steady in the face of declining demand, according to TravelClick's "May 2017 North American Hospitality Review." That's consistent with the trend that surfaced in the first quarter of the year.

For business booked for the second quarter, transient ADR is up by 1.9 percent despite a 2.5 percent drop in bookings. Group ADR edged up by 0.9 percent, although group bookings fell by 3.5 percent year-over-year for the quarter. Only the transient leisure segment posted growth in both respects, with a 1 percent rise in ADR coupled with 3.2 percent more bookings.

The numbers are based on group commitments and individual reservations in 25 major North American markets for hotel stays that were booked by May 1, 2017.

"Our latest data indicates that North American hoteliers are still dealing with dips in occupancy across the board, with bookings down 0.7 percent for all travel segments in the second quarter," said John Hach, TravelClick's senior industry analyst. "Future booking trends indicate that the inconsistency will likely continue throughout the upcoming summer travel season."

For the next 12 months, group bookings are almost flat, dipping by just 0.2 percent vs. the same period last year. Average daily rate is up by 1.8 percent, however. That's steadier than transient business travel, where bookings are down by 1.8 percent while ADR grew by a healthy 2.4 percent. Transient bookings overall are down by just 0.5 percent, with a 1.4 percent increase in ADR.

Group average daily rate is up by a robust 4.4 percent for committed bookings in the third quarter, despite a 5.6 percent drop in the number of third-quarter bookings. It's possible that meeting owners are waiting to see how market and travel uncertainties play out before booking business.