Group items tagged

NASHVILLE RECORDED A 38 percent year-over-year increase in meetings and events in April, according to Knowland. Meanwhile, Las Vegas maintained a steady ascent with a 22.8 percent year-over-year growth. Overall, the industry saw a marginal 1.3 percent year-over-year increase in meeting volume. Among the top 25 markets, meetings averaged 3,768 square feet, compared to 3,684 square feet in secondary markets, the report said. Average attendance in the top 25 rose slightly to 133, while secondary markets saw an average of 127 attendees. Top five markets with highest YOY event volume growth Nashville stood out as a meeting destination in April, leading in growth among the top 25 U.S. markets, the report added. It recorded an average space use of 3,885 square feet with 131 average attendees, largely driven by national associations such as the Association of Physical Plant Administrators.

ANNUAL CHANGES IN U.S. hotel utility costs and in the Consumer Price Index, or inflation, have historically proven to be strongly correlated. As of August 2022, CBRE is forecasting CPI growth to be 7.7 percent in 2022, followed by another 3.6 percent in 2023. Since inflation has averaged just 2.2 percent since 2000, these inflation projections have hoteliers concerned about operating costs. Given that rising energy costs are a significant driver of the current rise in CPI, hotel managers are especially worried about utility department expenses. Over the past 50 years, utility department expenses have averaged between 3 and 4 percent of total revenue, indicating that hotel managers have been successfully controlling energy costs in the face of fluctuating business volumes. This is particularly commendable given the highly fixed nature of utility expenses. To provide some context to the current challenging environment, we studied recent trends in hotel utility department expenses. The data come from a sample of more than 2,800 U.S. hotels that reported utility department expenses each year from 2015 through 2021 for CBRE's annual "Trends in the Hotel Industry" survey. In 2021 the properties in the sample averaged 209 rooms in size, with an annual occupancy rate of 54.2 percent and an average daily rate of $152.70.

U.S. HOTEL DEMAND declined by 0.5 percent year over year in the third quarter of 2023, according to CBRE. Simultaneously, there was a matching 0.5 percent increase in supply. The combined effect of these factors led to a 1 percent decrease in occupancy. ADR increased by 0.6 percent during the quarter, marking the slowest improvement since the pandemic recovery began 10 quarters ago, the CBRE data revealed. RevPAR decreased by 0.3 percent, as a modest decline in occupancy was partially offset by the rise in ADR. Despite sustained consumer spending, hotel demand and pricing power in Q3 were hampered by competition from alternative lodging sources like short-term rentals and cruise lines, along with an uptick in outbound international travel. According to the report, hotel wage growth in September outpaced the national average of 4.3 percent, registering at 4.7 percent, but declined from 7 percent at year-end 2022. Average hourly hotel wages fell nearly $10 below the national average, suggesting ongoing pressure for wage increases.

TAMPA-ST. PETERSBURG, FLORIDA led in meetings and events growth for the top 25 markets in February with a 20 percent year-over-year increase, according to Knowland. Denver and Boston came in second and third, respectively, while National Associations and Technology groups led in four of the top five markets. Overall, year-over-year event volume growth for the industry reached 5.3 percent, the report said. Meetings in the top 25 markets used an average space of 3,507 square feet, compared to 2,890 square feet in secondary markets. The top 25 markets had an average of 124 attendees, while secondary markets averaged 118 attendees. Additional insights into the key industry drivers for the top 25 markets with the highest meeting volumes include: Tampa-St. Petersburg (up 20 percent): national association, healthcare, charity/non-profit/social services, technology and wedding. Denver (up 7 percent): technology, national association, education, healthcare and construction. Boston (up 15 percent): education, healthcare, technology, training/education and travel.

LAS VEGAS SAW 18.5 percent year-over-year growth in group business this May, while Oahu Island, Hawaii, ranked second with a 17.9 percent year over year increase, according to Knowland. The average meeting space in the top 25 markets was 3,615 square feet, compared to 3,625 square feet in secondary markets. The top 25 markets averaged 128 attendees, while secondary markets had 127 attendees, Knowland said. Las Vegas led the top 25 U.S. markets in meeting growth in May, with an average space of 7,803 square feet and 287 attendees, the report said. Key drivers included technology events like the Electronic Distributor Show and national associations such as the International Council of Shopping Centers.

LAS VEGAS LED meeting volume growth in June for the second consecutive month with a 22.2 percent year-over-year increase, according to Knowland. St. Louis ranked second with a 12 percent year-over-year growth and the U.S. top 25 and secondary markets saw increases in total square footage used and group sizes. The average space used for meetings in the top 25 markets was 4,127 square feet with 141 attendees, while secondary markets averaged 4,085 square feet with 132 attendees, Knowland said. Las Vegas also remained a popular meeting spot in June, with sports entertainment entering the top five industry segments due to NHL draft-related meetings, the report found. The city led the top 25 markets, averaging 8,297 square feet and 282 attendees.

LOUISVILLE, KENTUCKY'S EVENT volume doubled to 94.9 percent year-over-year in July, according to Knowland. It is Louisville's fifth month in the top five secondary markets this year. Philadelphia led the top 25 markets with 27.7 percent growth, driven by a National Education Association event and several state-level education associations, according to Knowland. Louisville has become a key meetings hub in secondary markets, with an average of 4,935 square feet used and 119 attendees, while Philadelphia averaged 3,066 square feet and 117 attendees, the report said. Secondary markets grew by an average of 6.9 percent, compared to 3.6 percent for the top 25 markets.

EXTENDED-STAY ROOM SUPPLY grew 3.1 percent in July, outpacing the average monthly increase over the past two years, according to The Highland Group. The rise is partly due to WaterWalk by Wyndham, a mid-priced extended-stay brand added to the database in May 2024 after affiliating with Wyndham. July marked 34 consecutive months of supply growth at 4 percent or less, with annual supply changes under 2 percent for two years-both well below the long-term average, the report said. "July was an exceptionally good month for extended-stay hotels which outperformed the overall industry and the economy segment reported a monthly RevPar gain for the first time in more than one year," said Mark Skinner, The Highland Group's partner. The U.S. Extended-Stay Hotels Bulletin for July 2024 reported a 13.9 percent rise in economy extended-stay supply, with smaller gains in mid-price and upscale segments, largely due to conversions. New construction in the economy segment accounts for about 3 percent of rooms open compared to last year.

PHOENIX RANKED FIRST among the top 25 markets with 19.7 percent year-over-year growth in October, according to Cendyn's Sales Intelligence platform, formerly Knowland. This was its first time at the top spot this year, driven by national associations, technology, healthcare and financial/banking events. Las Vegas followed closely with 17.7 percent growth, placing it in the top five for the 10th consecutive month, Cendyn said. South Michigan and Florida's Panhandle led secondary markets, while Kauai, Hawaii, saw significant year-over-year growth at 72 percent. Phoenix averaged 5,612 square feet and 174 attendees, primarily driven by national association events, which made up 8.6 percent of event volume, the report said. Las Vegas remained in the top five, ranking second, supported by national association events and weddings. Across the top 25 markets, average space usage rose to 3,902 square feet with an average of 132 attendees.

U.S. EXTENDED-STAY room supply grew by 3.5 percent in June, exceeding the average monthly increase of the past two years, according to The Highland Group. June marked the 33rd consecutive month of supply growth at 4 percent or less, with annual changes remaining below 2 percent for the past two years. However, both metrics are well below the long-term average. The growth includes the addition of Water Walk by Wyndham, a mid-priced extended-stay brand, to the database in May following its affiliation with Wyndham, the report said. The 12.8 percent increase in economy extended-stay supply, along with modest gains in midprice and upscale segments, is mainly due to conversions, The Highland Group said. New construction in the economy segment is estimated at about 3 percent of rooms open compared to a year ago. The report noted that supply change comparisons have been affected by re-branding, shifting rooms between segments, de-flagging hotels that no longer meet brand standards, and the sale of hotels to apartment companies and municipalities. The trend is likely to taper off in the second half of 2024, with the full-year increase in extended-stay supply compared to 2023 remaining well below the long-term average.

THE U.S. HOTEL industry is on track to full recovery from the COVID-19 pandemic, according to STR's latest industry forecast. Progress may be uneven, however, as some obstacles, such as labor costs, still remain. ADR will near full recovery in 2022, averaging $130 while occupancy for the year is predicted to reach 63.4 percent. RevPAR's average for the year is set to be $82,down 4 percent compared to 2019, but it is expected to be fully recovered in 2023, according to the forecast given at the 43rd Annual NYU International Hospitality Industry Investment Conference. STR and Tourism Economics said changes in the nation's economy warranted the new forecast. "We have essentially moved up the top-line recovery timeline by one year, with the caveat that improved RevPAR projections are largely due to ADR," said Amanda Hite, STR's president. "ADR has risen more rapidly than we expected-in some cases, that rise was due to strong demand confronting capacity constraints, which enabled solid revenue management, while in other cases, the rise was more influenced by inflation. When adjusted for inflation, RevPAR is further off the pace and will likely remain below 2019 levels until at least 2025. Other than the first quarter of 2021, demand has mostly adhered to the forecast with strong leisure travel, slowly improving group business and an expected progressive increase in international arrivals next year. Of course, these are all national projections of top-line performance. Recovery is not playing out the same across the marketplace, and as noted in our latest monthly P&L release, the cost of labor is adding pressure on the bottom line, which is a contributing factor to many hotels driving rate. Recovery is progressing at a solid rate no doubt, but there will still be plenty of ups and downs along the way."

THE REPRESENTATION OF Black and women members on hotel industry boards is on the rise, signaling progress in board diversity, according to recent research commissioned by AHLA Foundation and conducted by Penn State's School of Hospitality Management. The surge surpasses the 2022 averages for firms in the Russell 3000 Index, while indicating multiple gains for the industry. The 2022 data analysis involved 230 board members from 28 companies spanning the years 2016 to 2022, the AHLA Foundation said. Key findings from the report include: In 2022, women held 31.3 percent of independent board seats on hotel public company boards, a notable surgefrom 22.5 percent in 2021. This surpasses the 2022 Russell 3000 Index average of 28.4 percent for women representation.

DRIVEN BY STRONGER-than-expected demand and moderate supply, CBRE has raised its forecast for hotel performance again this year, resulting in increased occupancy. CBRE revised its forecast for 2023 RevPAR to $97.89, up 6 percent year-over-year and an increase of $0.43 rise from the previous forecast. This positive revision is based on a 65-basis-point increase in expected occupancy compared to the previous forecast issued in February, CBRE said in a statement. Furthermore, the ADR is projected to grow by 3.7 percent in 2023, slightly lower than the previous forecast of 4.2 percent. According to CBRE Hotels Research, this is primarily due to slightly lower inflation expectations and a higher proportion of group travel and shoulder-period demand, which typically have lower rates. CBRE's baseline scenario forecast envisages an average GDP growth of 0.8 percent and average inflation of 4.6 percent in 2023. Given the strong correlation between GDP and RevPAR growth, changes in the economic outlook will directly impact the performance of the lodging industry, CBRE noted. "We are already starting to see signs that the easing of travel restrictions in Japan and China, combined with continued improvements in group and independent business demand, are bolstering demand heading into the heavy summer travel season," said Rachael Rothman, head of hotel research & data analytics at CBRE.

BOSTON IS THE most expensive city for hotel accommodations in the U.S., according to a recent survey by Cheaphotels.org. Portland was the cheapest city, the survey has found. The survey compared hotel rates across 50 U.S. destinations in October, which is typically the month with the highest hotel prices in most American cities. It specifically focused on hotels with a 3-star rating or higher, located in central areas, Cheaphotels said in a statement. Boston took the lead as the priciest city, with an average rate of $303 for the most affordable double room, the survey said. Following closely were New York City and Austin, with rates of $288 and $257, respectively. Cleveland claimed the fourth spot, with an average rate of $234 for the least expensive room. Notably, hotel rates in Ohio's second-largest city have surged by 25 percent compared to 2022.

AIR TRAVEL HASSLES lead fliers to skip an average of two trips annually, which will result in 27 million avoided trips and a $71 billion loss for the U.S. economy in the coming year, according to a recent report by U.S. Travel Association and Ipsos. The impact of traveler frustrations also leads to a loss of $4.5 billion in tax revenue. The federal government must prioritize improvements throughout the air travel ecosystem to foster greater growth, the association has said. "When almost 60 percent of recent air travelers equate the experience to or find it worse than going to the DMV, it's a worrisome sign that requires action," said Geoff Freeman, USTA president and CEO. "With targeted efforts, the federal government can certainly enhance the entire travel system." Half of travelers said they would increase air travel in the next six months if the experience were less of a hassle, the poll revealed. Similarly, business travelers would take an average of two more trips annually if travel frictions improved, resulting in 18 million additional trips and $52 billion in economic impact.

APPROXIMATELY 55.4 MILLION U.S. travelers are expected to travel 50 miles or more from home during the Thanksgiving holiday, marking a 2.3 percent increase from last year, according to AAA. This forecast represents AAA's third-highest Thanksgiving estimate since 2000, with 2005 and 2019 ranking as the top two years. "For many Americans, Thanksgiving and travel go hand in hand, and this holiday, we expect more people on the roads, skies, and seas compared to 2022," said Paula Twidale, Senior Vice President of AAA Travel. "Travel demand has been strong all year, and AAA's Thanksgiving forecast reflects that continued desire to get away and spend time with loved ones." According to AAA, the majority of Thanksgiving travelers will drive to their destinations. About 49.1 million Americans are expected to be on the road, a 1.7 percent increase from 2022. Gas prices this Thanksgiving could be lower than last year's national average of $3.58. The national average peaked at $3.87 in mid-August this year and has been decreasing despite global tensions affecting the oil market."

EXTENDED-STAY HOTELS OUTPEFORMED the broader hotel industry across all performance metrics in October, marking a notably strong month for the sector, according to The Highland Group. Extended-stay supply outpaced demand, leading to a decrease in occupancy. However, the decline was less pronounced than the overall hotel industry, where STR/CoStar reported a drop in demand compared to the previous year. Furthermore, the metrics of extended-stay hotels, including ADR, RevPAR, and revenues, demonstrated stronger growth compared to their counterparts in the broader hotel industry, The Highland Group said. The 2.2 percent net rise in extended-stay room supply in October, consistent with September, represents a modest increase compared to the average over the past 16 months. However, October marked the 25th consecutive month of 4 percent or less supply growth, significantly below the long-term average. The 12 percent surge in economy extended-stay supply, coupled with a reduction in mid-price segment rooms, primarily results from conversions, as new construction in the economy segment is estimated at around 2 percent of rooms compared to a year ago, the report added.

U.S. HOTELS WILL generate $46.71 billion in state and local tax revenue, more than ever before, according to a survey from the American Hotel & Lodging Association and Oxford Economics. Occupancy is expected to continue its recovery, the report said, but challenges remain. Average U.S. hotel occupancy is projected to reach 63.8 percent in 2023, just under 2019's level of 65.9 percent, according to AHLA. However, the labor shortage is expected to continue this year as hotels seek to fill jobs lost in the pandemic. As of December, national average hotel wages were at historic highs of more than $23 an hour and hotel benefits and flexibility are better than ever. Nearly 100,000 hotel jobs are currently open across the nation, according to job search site Indeed. "Hotels are making significant strides toward recovery, supporting millions of good-paying jobs and generating billions in state and local tax revenue in communities across the nation," said Chip Rogers, AHLA president and CEO. "To continue growing, we need to hire more people. Fortunately, there's never been a better time to be a hotel employee, with wages, benefits, flexibility and upward mobility better than ever before."

EXTENDED-STAY HOTELS reported mixed results in November compared to the broader hotel industry, as supply and demand showed gains and occupancy declined less than the total hotel industry, according to The Highland Group. However, the 2.2 percent net increase in extended-stay room supply for the month, consistent with September and October figures, represents a slight uptick compared to the average over the last 17 months. Also, relatively low ADR growth led to a modest increase in extended-stay hotel RevPAR. Supply growth stayed below 4 percent for the 26th consecutive month in November, well under the long-term average, The Highland Group said. The 13 percent increase in economy extended-stay supply and decline in mid-price segment rooms mainly result from conversions, as new construction in the economy segment is estimated at about 3 percent of rooms open compared to one year ago.

TOTAL REVENUES FROM extended-stay hotel rooms fell by 0.2 percent in March, marking the first monthly decline in over three years, according to The Highland Group. However, the revenue decline was smaller than the 1.6 percent contraction estimated by STR/CoStar for the overall hotel industry. Meanwhile, extended-stay room supply increased by 2.7 percent in March, a slight uptick compared to the average monthly growth over the past two years, the report said. This marks the 30th consecutive month of supply growth at 4 percent or less, with the annual change remaining below 2 percent for two years. However, both these figures lag behind the long-term average. The 14.2 percent rise in economy extended-stay supply, coupled with a small increase in mid-price segment rooms, primarily stems from conversions, The Highland Group said. New construction in the economy segment is estimated to account for approximately 3 percent of open rooms compared to one year ago.