Global Hotel Market Posts Positive Gains in March

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The Americas

According to STR Global, the Americas region recorded positive results in the three key performance metrics when reported in U.S. dollars for March 2011.

In the first quarter of 2011, the Americas region experienced a 5.5-percent increase in occupancy to 55.3 percent, a 3.1-percent rise in ADR to US$102.60, and an 8.8-percent jump in RevPAR to US$56.74.

The Americas region ended February with a 5.8-percent increase in occupancy to 61.6 percent, average daily rate was up 3.9 percent to US$104.90, and revenue per available room rose 9.9 percent for the month to US$64.62.

Among the key markets in the region, Santiago, Chile, experienced the largest occupancy increase, rising 73.9 percent to 84.6 percent, followed by Mexico City, Mexico, with a 14.0-percent increase to 67.0 percent. Sao Paulo, Brazil, fell 7.5 percent in occupancy to 66.6 percent, reporting the largest decrease in that metric, followed by New York, New York, with a 4.1-percent decrease to 78.2 percent.

Rio de Janeiro, Brazil, reported the largest ADR increase, rising 40.9 percent to US$251.53, followed by Sao Paulo with a 26.3-percent increase to US$141.16. Vancouver, Canada, posted the only ADR decrease, falling 1.8 percent to US$130.43.

Santiago (+79.5 percent to US$143.61) and Rio de Janeiro (+44.3 percent to US$197.37) achieved the largest RevPAR increases for the month. Vancouver fell 0.6 percent in RevPAR to US$79.81, reporting the only decrease among the region's key markets.

Performances of key countries in March (all monetary units in local currency):

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Europe

The European hotel industry posted positive results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for March 2011.

Year-over-year, March 2011 figures for Europe (U.S. dollars, euros and British pounds):



In first quarter 2011, Europe reported increases in all three key performance metrics. The region's occupancy rose 3.0 percent to 56.4 percent, its ADR was up 5.7 percent to EUR98.30, and its RevPAR increased 8.9 percent to EUR55.44.

"The Europe hotel industry reported solid performance during the first quarter of 2010, continuing its steady growth with gains in occupancy and average room rate", said Elizabeth Randall, managing director at STR Global. "All European subregions achieved occupancy and rate growth for the month and the quarter".

Highlights from key market performers for March 2011 include (year-over-year comparisons, all currency in euros):

• Venice, Italy, achieved the largest occupancy increase, rising 32.5 percent to 65.7 percent, followed by Oslo, Norway, with a 22.0-percent increase to 68.3 percent.

• Two markets reported occupancy decreases of more than 5 percent: Malmo, Sweden (-9.4 percent to 55.7 percent), and Salzburg, Austria (-6.2 percent to 55.9 percent).

• Four markets experienced ADR increases of more than 20 percent: Cologne, Germany (+26.2 percent to EUR119.65); Istanbul, Turkey (+24.4 percent to EUR150.33); Vienna, Austria (+24.4 percent to EUR109.33); and Zurich, Switzerland (+21.6 percent to EUR211.94).

• Tel Aviv, Israel, fell 6.0 percent in ADR to EUR160.80, reporting the largest decrease in that metric.

• Six markets achieved RevPAR increases of more than 30 percent: Venice (+54.7 percent EUR136.74); Cologne (+44.9 percent to EUR86.98); Oslo (+33.8 percent to EUR87.18); Vienna (+33.2 percent to EUR81.24); Gothenburg, Sweden (+32.3 percent to EUR71.90); and Istanbul (+31.0 percent to EUR108.43).

• Salzburg fell 9.7 percent in RevPAR to EUR40.73, reporting the largest decrease in that metric.

Performances of key countries in March (all monetary units in local currency):

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Middle East & Africa

The Middle East/Africa region reported mixed performance results during March 2011 when reported in U.S. dollars.

The region's occupancy ended the month with a 12.9-percent decrease to 57.8 percent, its average daily rate rose 9.0 percent to US$172.89, and its revenue per available room fell 5.1 percent to US$99.98.

In first quarter of 2011, the Middle East/Africa region's occupancy fell 7.8 percent to 56.8 percent, its ADR was up 9.4 percent to US$176.31, and its RevPAR experienced a slight increase, rising 0.9 percent to US$100.17.

"Hotel performance across Northern Africa and parts of the Middle East continue to be influenced by events in the region", said Elizabeth Randall, managing director of STR Global. "The most significant monthly RevPAR declines (in local currency) of the countries we track were reported in Bahrain (-79 percent) and Egypt (-68 percent). Occupancy is the main driver of the declines, as both markets reported occupancies of only 25 percent.

"Despite these events, the Middle East/Africa region again achieved the highest average room rate of the four world regions (US$176) and ended the first quarter with a slight RevPAR growth resulting from declining occupancy levels and growing average room rates. The declining occupancy levels should be a temporary feature, and we expect to see improvement as soon as the political situation in each country stabilizes".

Highlights among the region's key markets for March include (year-over-year comparisons, all currency in U.S. dollars):

• Abu Dhabi, United Arab Emirates, experienced the only double-digit occupancy increase, rising 13.0 percent to 71.2 percent.

• Cairo, Egypt, fell 67.9 percent in occupancy to 23.3 percent, reporting the largest decrease in that metric, followed by Beirut, Lebanon, with a 25.0-percent decrease to 47.9 percent.

• Johannesburg, South Africa, rose 17.0 percent in ADR to US$119.33, reporting the largest increase in that metric.

• Abu Dhabi posted the largest decrease, falling 21.3 percent to US$176.72.

• Three markets experienced RevPAR increases of more than 5 percent: Cape Town, South Africa (+8.5 percent to US$109.67); Johannesburg (+7.1 percent to US$66.71); and Jeddah, Saudi Arabia (+5.2 percent to US$137.02).

• Three markets ended the month with RevPAR decreases of more than 20 percent: Cairo (-70.0 percent to US$27.40); Beirut (-29.9 percent to US$91.49); and Amman, Jordan (-20.4 percent to US$76.76).

Performances of key countries in March (all monetary units in local currency):

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Asia Pacific

Hotels in the Asia/Pacific region experienced mostly positive results in the three key performance metrics during March 2011 when reported in U.S. dollars.

In year-over-year measurements, the Asia/Pacific region's occupancy fell 3.5 percent to 66.5 percent, average daily rate increased 13.8 percent to US$144.04, and revenue per available room jumped 9.9 percent to US$95.77.

In the first quarter of 2011, the Asia/Pacific region was virtually flat in occupancy, reporting a 0.2-percent decrease to 64.0 percent. ADR was up 13.1 percent to US$143.81, and RevPAR increased 12.8 percent to US$92.03.

"This month we saw the impact of the earthquake, tsunami and its aftermaths on the Japanese hotel market," said Elizabeth Randall, managing director of STR Global. "Across Japan, occupancy declined 21 percent for the month in addition to a slight drop in average rate. Cities in the southern parts of Japan performed better than cities closer to the affected north-eastern area as people moved farther away from the threat of radiation exposure. Tokyo's occupancy moved from 83 percent in March 2010 to 55 percent this year, and its average room rate (-4 percent) dropped slightly more than the national average (-0.1 percent) to JPY14,181. Osaka's occupancy, in comparison, dropped only slightly by 2.8 percent to 81 percent, and its average rate increased 10 percent to JPY12,083. In the city of Sendai, where we usually track the performance of nine hotels, three properties closed and the March performance of six reporting hotels showed a decline of 23 percent in RevPAR.

"Asia/Pacific overall finished the first quarter 2011 with a level occupancy performance and increases in average room rate to gain 13 percent in RevPAR," Randall continued. "As we saw a strong demand recovery in 2010, we expect to see occupancy performance level out and average room rates grow. Asia/Pacific achieved the highest occupancy (64 percent) of the four world regions in the first quarter".

Highlights from key market performers for March 2011 in local currency (year-over-year comparisons):

• Bangkok, Thailand, increased 10.0 percent in occupancy to 67.8 percent, reporting the largest increase in that metric, followed by Jakarta, Indonesia, with a 6.0-percent increase to 71.9 percent.

• Five markets experienced double-digit ADR increases: Hong Kong, China (+28.2 percent to HKD2062.02); Jakarta (+14.5 percent to IDR809282.30); Bali (+12.8 percent to IDR1092414.91); Beijing, China (+10.3 percent to CNY698.32); and Seoul, South Korea (+10.0 percent to KRW193755.16).

• Hong Kong jumped 33.2 percent in RevPAR to HKD1790.77, followed by Jakarta with a 21.4-percent increase to IDR582069.77).

Performances of key countries in March 2011 (all monetary units in local currency):

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