Hotels: Record Demand in 2012, Near 2008 Room Rates, Little New Supply

Some interesting year end observations from Patrick Mayock at HotelNewsNow.com: ‘Unexpected strength’ marks 2012 performance. A few themes for 2012:

1. Record demand
“We are still selling more rooms than we ever have before and expect that growth to remain strong in 2013,” said Vail Brown, VP of global business development and marketing at STR ... The U.S. hotel industry set a record during July for the most roomnights ever sold in a single month with 105,954,122. The summer months of June and August were strong as well, both posting more than 100 million roomnights sold.

Through November, the most recent data available, U.S. hotels had sold approximately 1 billion roomnights, an increase of 2.9% from the same period in 2011.
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2. Supply slowing creeping
“In the U.S., we are seeing a bump in construction year to date,” Brown said.
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Preliminary data suggests 2012 in aggregate ended with a 0.5% increase in supply.

3. Rates returning to the peak
While the hotel industry still hasn’t reached its 2008 peak in average daily rate of $107.41, it’s beginning to make headway, Brown said.
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Preliminary data also suggests the hotel industry in general finished the year with a 4.3% increase in ADR to $106.17.

Still, hoteliers have a lot of ground to make up on an inflation-adjusted basis, Brown said.

4. Group’s late-year surge
“We really haven’t seen a large fluctuation in demand this year as compared to last year—until October where we really saw group demand skyrocket past the prior two years,” Brown said.

Hoteliers sold 11.1 million group roomnights during the month, which was well above the “golden year” of 2007, she said.