Measuring Weekly Hotel Performance

It is no secret that the hospitality industry has been struggling in different fronts ever since the global economic crisis occurred. To get an accurate overview of the condition in the United States today, performance measurements for the week March 15-21 has been conducted. Metrics per month and per quarter are very helpful in determining financial performance, but this weekly year-on-year comparison provides a better overview of the real effects of the tough times.

Using this measurement, all three key measurements declined according to the STR. The occupancy rate fell by 4.7 percent, average daily rate declined 8.0 percent, and revenue per available room dropped to 12.3 percent this week. The average daily rate is now pegged at US$99092 while RevPAR is at $US58.45. If this is not alarming already, all major cities except for Washington DC showed declining performance during this timeframe.

Washington, DC was the only market that increased on its key performance measurements. However, even that increase is on the low side of the scale. Occupancy was 69 percent which is 1.7 percent. Meanwhile ADR was pegged at US$152.91 which is up 0.9 percent. And the RevPAR of the city increased to US$105.46 which is up 2.6 percent from last year.

Seeing that the United States is a very diverse market, its remaining top 25 cities showed mixed rates. For example, St. Louis, Illinois showed an increase in occupancy while Houston, Texas declined by 1.3 percent. One notable decrease is that from New York, New York. It dropped 25.5 percent in its ADR which is the largest in the research. The city also posted the largest RevPAR decrease because it dropped 36.6 percent to only US$151.05.

Given these severe setbacks in the hospitality industry, hotel revenue managers might wonder, is there still hope in increasing hotel sales in the next few months? The truth is, the condition today is one of the worst in history. In fact, economic performance has not been this bad since the Great Depression.

Yet, it is important to realize that the conditions from the previous eras are far different from the conditions today. Now, it is possible to use inventory software, hotel revenue management software, and internet marketing to reach a larger audience: a worldwide audience. With this fact in mind, the answer is yes. It is possible to increase RevPAR and boost hotel sales even during difficult economic times.