by Calculated Risk on 12/30/2010 08:18:00 PM

A weekly update on hotels from HotelNewsNow.com: STR: US performance for week ending 25 Dec.

In year-over-year comparisons, occupancy increased 2.2 percent to 34.6 percent, average daily rate was up 1.4 percent to US$87.13, and revenue per available room finished the week up 3.6 percent to US$30.16.

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 graph gallery.

Notes: the scale doesn't start at zero to better show the change. The graph shows the 4-week average, not the weekly occupancy rate.

This is the slow season for hotels, and the key will be if business travel picks up early next year.

When 2010 started, hotel occupancy was running about the same rate as in 2009 - the worst year for hotels since the Great Depression. In the spring, the occupancy rate increased, and by mid-year occupancy had caught up with 2008 (2008 was weak year for hotels). For the last couple of months the occupancy rate has been running ahead of 2008. The year-over-year comparisons will look great in early 2011, but an important comparison will be with the median for '00 through '07.

A few comments from Jeff Higley at HotelNewsNow.com: There’s more than one way to describe 2010

I don’t fall in the camp that believes the United States hotel industry is in the midst of a full recovery just yet.

Sure, there are signs the worst is over as hoteliers across the country are trying to dig out from the economic mess of the past two years. 2010 has been a year of extremes for the industry. It seems every week sends a different signal regarding the industry’s trek to recovery.
...
One full-service property I stayed at had a 7% occupancy rate on one of the nights of my visit; another property had 12 cars in the parking lot during the overnight hours. ... One the other hand, more roomnights were sold during July than any other month EVER, according to STR data.
...
In a nutshell, the hotel industry is seeing positive signs, but there’s still a long way to go before it can say it is in a true recovery. There are plenty of ways to measure success, but in this business there’s only one that truly counts: rates. When we see at least four months of year-over-year increases in rate and when the overall average daily rate gets to within five bucks of its $107 peak in 2008 (it’s about $10 off right now), it will be time to truly break out the recovery bubbly.

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