Hoteliers are hoping the arrival of spring will aid the struggling hotel industry.
Last week, Smith Travel Research, one of the nation’s premier hotel research firms, issued its U.S. hotel report for the week April 5 to April 11.
In year-over-year measurements, the industry’s occupancy rate fell 17.9 percent to end the week at 52.6 percent, versus 64.1 percent for the comparable week in 2008. The average daily rate dropped 12.5 percent to $96.60 versus $110.36 for the same week in 2008. The largest decline was registered for the revenue per available room, or revpar, for the week, which decreased 28.1 percent to finish at $50.85. The average revpar fell 28 percent from the 2008 revenue, which was $70.76.
The average daily room rate in New York City was down 26.8 percent, or $74.94, to $205.02 year-over-year. In the prior week, from March 29 to April 4, the average room rate in the city fell 24.9 percent to $199.03 per night, while revpar was down 33.1 percent to $142.02.
Smith Travel Research also reported that the bottom dropped out in the New York City hotel industry in October after the bankruptcy of Lehman Brothers. New room hotel supply growth contributed to the problem with a 3.5 percent increase in the number of rooms for the year.
Demand for rooms declined 8.5 percent for the three-month period ending February 28, 2009. While there has been some growth in hotel construction in the New York metro area, the average growth has been restrained during the past five years. Consequently, new supply in the New York metro area likely will be more easily absorbed.
The research company believes that with a large share of luxury hotels and the retrenchment of the financial sector, hotel operators will seek new sources of business and explore ways to reinvent their product offerings.
Among the various chain scale segments, the upscale segment reported the largest decrease in occupancy, 22 percent to 56 percent occupancy. The uber-luxury segment reported the largest decrease in both the average daily rate and revpar, down 18 percent to $138.88 and 35.9 percent to $82.95, respectively.
Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.