by Calculated Risk on 7/15/2010 12:36:00 PM

Hotel occupancy is one of several industry specific indicators I follow ...

First, some comments from the Marriott conference call today:

After dropping for eight straight quarters occupancy rates bottomed in the Fourth Quarter of 2009. .. [W]e said we hope to increase room rates year-over-year, some time in 2010. As it turned out we were able to increase room rates much faster than we anticipated. In period five roughly equivalent to May, domestic Company operated room rates rose 1%. The first increase in nearly two years. In period six, roughly equivalent to June, domestic Company operated room rates rose 3%.
...
Leisure demand in the Second Quarter ... was solid. On weekdays Marriott brand REVPAR rose an impressive 9% in the quarter but weekends held their own with REVPAR up 5%.
...
Business in Europe and the UK remains strong despite rumbling of economic concern. Our European hotels are benefiting from strong American tourism, attracted to fabulous destinations that are on sale due to the weaker currencies. In Asia, occupancy rates at Company operated hotels rose over 16 points as newer hotels continued to mature and the Shanghai world expo attracted strong demand.

And from HotelNewsNow.com: STR: US results for week ending 3 July 2010

Overall, in year-over-year measurements, the industry’s occupancy increased 3.9 percent to 62.5 percent, ADR rose 0.4 percent to US$94.69, and RevPAR was up 4.3 percent to US$59.17.

The following graph shows the four week moving average for the occupancy rate by week for 2008, 2009 and 2010 (and a median for 2000 through 2007).

Click on graph for larger image in new window.

Notes: the scale doesn't start at zero to better show the change.

On a 4-week basis, occupancy is up 6.5% compared to last year (the worst year since the Great Depression) and 5.3% below the median for 2000 through 2007.

A little more than half way back ...

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