Global Hotel Market Slowly Improving; Dealing with Sluggish World Economies

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According to the latest data compiled by Smith Travel Research (STR) and STR Global, hotel performance in most markets is slowly improving, but still dealing with sluggish global economic conditions.

Here are the key hotel performance highlights from STR's report:

The Americas

The Americas region recorded mixed results in the three key performance metrics when reported in U.S. dollars for March 2010.

In March 2010, the region's occupancy rose 5.7 percent to 58.2 percent, average daily rate ended the monthly virtually flat with a 0.8-percent decrease to US$100.57, and revenue per available room increased 4.8 percent to US$58.53.

Among the key markets, Boston, Massachusetts, reported the largest occupancy increase, rising 18.0 percent to 62.3 percent, followed by Sao Paulo, Brazil (+16.6 percent to 71.6 percent), and New York, New York (+16.0 percent to 81.4 percent). Santiago, Chile, posted the only double-digit occupancy decrease, falling 29.7 percent to 48.6 percent.

Three markets experienced ADR increases of 25 percent or more: Sao Paulo (+35.2 percent to US$108.55); Vancouver, British Columbia (+31.9 percent to US$134.14); and Rio de Janeiro, Brazil (+29.2 percent to US$165.59). Chicago, Illinois, reported the largest ADR decrease, falling 8.2 percent to US$98.77, followed by Buenos Aires, Argentina (-7.2 percent to US$142.61), and San Juan, Argentina (-6.5 percent to US$186.49).

Sao Paulo posted the largest RevPAR increase for the month, up 57.6 percent to US$77.74, followed by Rio de Janeiro with a 39.8-percent increase to US$126.42. Two markets reported RevPAR decreases: Santiago (-18.8 percent to US$80.66) and Chicago (-1.1 percent to US$54.57).

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

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Asia / Pacific Region

Hotels in the Asia/Pacific region experienced increases in all three key performance metrics for March 2010 when reported in U.S. dollars.

In year-over-year measurements, the Asia/Pacific region's occupancy rose 13.7 percent to 67.6 percent, average daily rate increased 13.5 percent to US$130.56, and revenue per available room jumped 29.0 percent to US$88.22.

"The Asia/Pacific region is still leading the way in the global recovery", said Elizabeth Randall, managing director of STR Global. "It has posted five consecutive months of occupancy, ADR and RevPAR increases, fueling a 23-percent RevPAR jump in the first quarter of 2010."

Highlights from key market performers for March 2010: (year-over-year comparisons, all currency results in U.S. dollar)

• All of the region's key markets reported increases in both occupancy and RevPAR for the month.

• Beijing, China, experienced the largest occupancy increase, rising 33.8 percent to 67.1 percent, followed by Phuket, Thailand (+32.4 percent to 77.3 percent), and Shanghai, China (+24.8 percent to 60.4 percent).

• Five markets posted ADR increases of more than 25 percent: Brisbane, Australia (+40.5 percent to US$162.22); Sydney, Australia (+36.6 percent to US$164.78); Seoul, South Korea (+29.3 percent to US$160.95); Hong Kong, China (+28.4 percent to US$216.71); and Melbourne, Australia (+26.2 percent to US$168.68).

• Osaka, Japan, posted the only decrease in any of the three key performance metrics, ending the month virtually flat with a 0.9-percent ADR decrease to US$119.50.

• Four markets reported RevPAR increases of more than 40 percent: Phuket (+55.7 percent to US$103.36); Brisbane (+53.3 percent to US$134.79); Sydney (+46.0 percent to US$140.79); and Hong Kong (+43.9 percent to US$178.76).

Performances of key countries in March 2010 (all monetary units in local currency):

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European Market

The European hotel industry posted generally favorable results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for March 2010, according to data compiled by STR Global.

Year-over-year March 2010 figures for Europe (U.S. dollars, euros and British pounds):



"During March, Europe posted its first ADR increase (in euro terms) since July 2008", said Elizabeth Randall, managing director of STR Global. "Average rates across the continent rose 0.9 percent to €94.

"The first quarter finished with RevPAR improvements in every European sub-region, boosted mainly by improving occupancy levels", she continued. "However, average room rates still continue to be under pressure in Eastern and Southern Europe for the quarter, highlighting the widespread economic difficulties in these countries."

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

• Tel Aviv, Israel, reported the largest increases in all three key metrics: Occupancy rose 41.2 percent to 75.2 percent, ADR increased 19.2 percent to EUR176.07, and RevPAR jumped 68.4 percent to EUR132.34.

• Salzburg, Austria, followed Tel Aviv with a 28.4-percent occupancy increase to 60.2 percent.

• Gothenburg, Sweden, posted the largest occupancy decrease, falling 12.1 percent to 55.3 percent, followed by Oslo, Norway, with a 9.8-percent decrease to 56.3 percent.

• Four markets, other than Tel Aviv, experienced ADR increases of more than 10 percent: Munich, Germany (+12.3 percent to EUR98.39); Malmo, Sweden (+11.5 percent to EUR90.33); London, England (+11.0 percent to EUR132.69);and Geneva, Switzerland (+10.7 percent to EUR254.12).

• Cologne, Germany posted the largest ADR decrease, falling 18.3 percent to EUR94.95, followed by Prague, Czech Republic, with a 14.0-percent decrease to EUR65.35.

• Four markets, other than Tel Aviv, experienced RevPAR increases of more than 20 percent: Salzburg (+40.7 percent to EUR42.62); Munich (+34.3 percent to EUR68.89); Barcelona, Spain (+23.9 percent to EUR65.70); and Geneva (+21.9 percent to EUR183.50).

• Cologne posted the only RevPAR decrease of more than 15 percent, falling 19.8 percent to EUR61.65.

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

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Middle East / Africa Markets

The Middle East/Africa region reported increases in all three key measurements for March 2010 when reported in U.S. dollars, according to data compiled by STR Global.

The region's occupancy rose 2.9 percent to 67.6 percent, average daily rate increased 3.6 percent to US$161.75, and revenue per available room grew 6.6 percent to US$109.29.

"Hotels in the Middle East/Africa region posted their second month of RevPAR growth in March, finishing the first quarter with a 1-percent increase", said Elizabeth Randall, managing director of STR Global. "The region's performance was pushed up by strong results from African hotels whilst Middle Eastern hotels reported RevPAR declines for the month and the quarter.

"However, March was the second month Middle Eastern hotels reported occupancy increases and less severe ADR declines, indicating the region has started to recover", Randall continued. "Furthermore, Middle Eastern hotels reported the highest ADR with US$212 of all world sub-regions for the month of March."

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

• Muscat, Oman, reported the only double-digit occupancy increase, rising 15.5 percent to 69.1 percent.

• Four markets posted occupancy decreases: Abu Dhabi, United Arab Emirates (-24.2 percent to 64.0 percent); Beirut, Lebanon, (-9.3 percent to 64.8 percent); Johannesburg, South Africa (-7.7 percent to 60.4 percent); and Cape Town, South Africa (-7.3 percent to 66.1 percent).

• Three markets experienced ADR increases of more than 20 percent: Johannesburg (+36.4 percent to US$103.12); Cape Town (+34.3 percent to US$152.76); and Beirut (+23.8 percent to US$201.65).

• Abu Dhabi posted the largest ADR decrease, falling 27.7 percent to US$228.14, followed by Muscat with a 16.3-percent decrease to US$245.89.

• Johannesburg reported the largest RevPAR increase, rising 25.9 percent to US$62.27, followed by Cape Town with a 24.5-percent increase to US$100.97.

• Two markets posted RevPAR decreases: Abu Dhabi (-45.2 percent to US$145.94) and Muscat (-3.4 percent to US$170.03).

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

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