Steady Increases in Hotel Occupancy Rates

 

Hoteliers in the United States saw their hotel occupancy rise this past summer and saw a noticeable increase in corporate travelers.

According to STR and Global data, the Americas region showed hotel occupancy at 70 percent in July, a 0.5 percent increase from 2011 and 67.8 percent in August, a 2.8 percent increase from 2011.

Keyur Naik, vice president of Hawkeye Hotels, says the increased occupancy has a lot to do with business traveling.

“I think overall the business travel has picked up and you know in 2009 and 2010 where it was a little rough it looks like things are improving,” he says. Naik adds that in addition to seeing an increase in occupancy from business travelers, he has also seen a slight increase from foreign travelers.

“The dollar has become cheaper so it’s better for people from outside to come in and spend here,” he explains.

Wendy Woodbury, hospitality manager of Woodbury Corporation, has seen a similar increase in corporate travel.

“We’ve started to see throughout the later summer months more corporate travel increasing as far as training goes,” she says.

Corporate travel during the recession years decreased in group size and frequency of travel and have now picked up, Woodbury adds.

Although occupancy has increased, hoteliers say that the rise hasn’t exceeded occupancy rates that they experienced before the recession years during 2009-11. However, Woodbury says that their brand of hotels have taken advantage of the quieter occupancy times to make improvements to their hotels and their brand.

“Luckily we were able to use some of the slower areas of time to renovate and do a lot of brand initiatives and implement them during that lull,” Woodbury says. Upgrades and improvements include a new lobby concept, a new fitness room regime and a new food and beverage concept.

“We were able to implement those and then kind of wow those guests when they started to come back this second and third quarter,” she adds.

Hotel executives are hopeful that the increased occupancy they experienced in the summer months of 2012 will sustain through to the next quarter and 2013. They also expect Average Daily Rates to increase.

“We’re hitting demand levels now that are equal to 2008 which was kind of the pinnacle, kind of the peak of demand for hospitality. I wouldn’t expect demand to continue to increase, obviously some rate increase over the next year or two years but probably not much more,” says Graydon Pearson, president of Pearson Hospitality Group.

Naik thinks the occupancy trend is positive, however, the election outcome will be a deciding factor for many businesses.

“Businesses are currently making capital but they are afraid of making a bold move because they want to see the political outcome of the budget,” he says.

Naik believes once businesses know what direction and policies the government has in store, they will be more confident in investing which may lead to more corporate travel.

Hospitality Designs
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