Hotels across the world have seen a broad trend of rising ADRs, despite falling occupancy
Global occupancy in hotels around the world, excluding the United States, fell by 1.2 percentage points (ppts) in the week ending March 15, even as the Average Daily Rates (ADRs) rose by 5.3 pc, says a report by global hospitality industry tracking firm STR.
In a press statement STR says that in the week of March 9-15, global occupancy rates settled at 64.1 pc, while the Revenue Per Available Room (RevPAR) rose 3.3 pc, the sharpest increase in the past three weeks.
STR says that occupancy was down in each of the 10 largest countries, ranked based on supply. STR says that the hotels in Mexico, with a growth of 23.9 pc and Japan, with 21.5 pc, continued to see the largest gains in their performance, driving by ADRs rising by 23 pc.
It adds that eight of the 14 STR-defined markets in Mexico increased RevPAR, led by strong growth of 30 pc in the Mexican Caribbean, Cancun and Baja California. Nine of the 11 markets in Japan posted RevPAR increases led by Tokyo, where the measure was up 41.5 pc on an ADR gain of 37.6 pc. All but one Japanese market saw ADR rise, with most seeing double-digit gains.
Revenues of hotels around the world remain robust in March
Only four of the largest countries saw RevPAR increase this week. Indonesia, that is up 1.9 pc and France, which rose 0.3 pc accompanied Mexico and Japan, but their gains paled in comparison. Indonesia’s gain was driven by ADR as occupancy dropped. This reflects a shift in the mix of travelers, which is due in part to Ramadan when many Muslim visitors refrain from traveling.
STR says that the top European countries all posted RevPAR declines, impacted in part by a shift in spring holidays. Canada was also down, down 2.5 pc due to falling occupancy as ADR was up.
The statement adds that with spring starting, hotels will have to be patient for the season to bloom, assuming consumers do not wither away. Forward STR data shows occupancy on the books in the US improving significantly next week, followed by a decline during the Easter week, due to falling group and business travel. The later spring break will increase leisure travel, while business and group travel may slow. All to say that the next few weeks are predicted to be a bit choppy. Globally, ADR is expected to continue to increase while occupancy flattens.
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