Are You Better Off Now than 4 Years Ago?

Hotel owners, are you better off now than you were four years ago? Consider these news bits:

September 12, 2012

It was a sizzling summer season for the American hotel industry, with hotel rates heating up across the country according to HotelsCombined's year-over-year price index.

Based on average hotel prices throughout June, July and August, the majority of major U.S. destinations saw healthy rate increases in summer 2012 compared to summer 2011, with an average upturn of 17%.  Anaheim snagged the highest price increase, with a 43% rise in the average nightly hotel rate of $109 in 2011 to $155.25 in 2012.  The second-highest upsurge came from North Myrtle Beach, with a 36% rise in the average hotel rate of $143.01 in 2011 to $194.86 in 2012....

"Overall, the upturn data coming out of the U.S. was quite impressive," says HotelsCombined VP of Business Development Yury Glikin.  "It's evident that the tourism sector there is experiencing significant growth and development compared to other international destinations."

September 14, 2012

The U.S. hotel industry is making strides on the road to profitability, although progress varies by market and chain scale, according to new data from STR and STR Analytics' Hotel Operating Statistics, or HOST Study.

"For 2011, the total  U.S. hotel industry saw net income of $33 billion," said Ali Hoyt, business project manager at STR Analytics, during a breakout panel titled "Unlocking the profitability puzzle" during last week's Hotel Data Conference.  STR and STR Analytics are parent and sister companies of HotelNewsNow.com, respectively.

Profitability for the Industry in general during the past 10 years has moved consistently among the chain-scale segments.  After a steady return during the years following 9/11, the industry began declining in profitability during 2006, reaching a trough in 2009.

The luxury segment ̶  typically the first in and out of recessions ̶  fell the furthest, decreasing 51% during the downturn, said Caitlyn Milton, business intelligence manager  at STR Analytics.

However, as the industry began climbing toward recovery during 2010, the luxury segment led with a 33% increase in profitability.

The economy segment, meanwhile, saw the strongest translation of revenues into house profit, or profit before deductions for fixed charges and management fees.  The chain scale recorded 42.3% profitability during 2011, following by the midscale segment at 27.1%.

Luxury was the least profitable at 15.7%.  However, the segment posted a 41.5% increase in profitability compared to the prior year, which Hoyt said is because of the segment's total dollar volume.  That is, a small increase in luxury profitability equates to a much larger actual dollar value.

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Comments

Ups and Downs

Stanley, Are there any factors - other than the usual economic vicissitudes - that are peculiar to the U.S. hotel industry that you see affecting the positive trends that you describe?

Ups and Downs

Stanley, Are there any factors - other than the usual economic vicissitudes - that are peculiar to the U.S. hotel industry that you see affecting the positive trends that you describe?