by Calculated Risk on 9/24/2009 12:43:00 PM

We are now into the business travel season, and as expected, RevPAR is off sharply from 2008.

From HotelNewsNow.com: Oahu Island occupancy increases in STR weekly numbers

Overall the U.S. industry’s occupancy fell 8.6 percent to end the week at 59.6 percent. Average daily rate dropped 10.5 percent to finish the week at US$98.34. Revenue per available room for the week decreased 18.3 percent to finish at US$58.57.

Click on graph for larger image in new window.

This graph shows the YoY change in the occupancy rate (3 week trailing average).

The three week average is off 8.4% from the same period in 2008.

The average daily rate is down 1.5%, and RevPAR is off 18.3% from the same week last year.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

After Labor Day business travel becomes far more important for the hotel industry than leisure travel, and so far there is no evidence that business travel is recovering significantly - especially at the high end - from Bloomberg: Luxury Hotels in U.S. Risk Default as $850 Rooms Remain Empty

Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, ... “All segments are showing signs of distress but the luxury segment carries much higher loan balances and is more clearly affected,” [said] Frank Innaurato [of] Realpoint ...

Occupancy among chains with the costliest rooms fell to 60 percent in the first half from 70 percent a year earlier, according to Smith Travel Research. The decline was the industry’s largest for that period. ...

The U.S. hotel loan-delinquency rate may climb to 8.2 percent by year-end, Morgan Stanley analysts led by Andy Day said in a June 23 report. That would match the peak from the last recession in 2001.

Upscale hotels are suffering from “a heightened focus on prudent corporate travel expenditures,” as well as the pullback in vacation travel, Day said.
emphasis added