Barometer of hotel room revenue: a regular service of Smith travel research.(STATISTICAL SNAPSHOTS)

Room revenue in the U.S. lodging industry in the second quarter of 2007 was 7 percent higher than it was during the same period in 2006 and slightly (0.3 percent) more than the amount expected on the basis of past trends. The accompanying chart shows the comparison. The number of available rooms grew more than 1 percent during the quarter, while the number sold (demand) increased 1.5 percent. The average daily room rate rose 5.5 percent, but the revenue per available room (RevPAR) was up nearly 6 percent because the small rise in net demand added to the change in the average daily rate (ADR). The modest improvements can be attributed to increased business travel since the continued crisis in the housing market and the high cost of energy have curtailed leisure trips.

Preliminary estimates for the third quarter of 2007 show that business travel should be fair but leisure travel will again be below average. Room revenue is estimated at more than $29 billion, about 1 percent below the amount expected based on past trends, but nearly 7 percent above the third quarter of 2006. We expect total room revenue for the year to be more than $106 billion, almost 7 percent higher than 2006. However, since demand is expected to rise less than 1 percent, the increase will be due to higher room rates and an increase of more than 1 percent in the number of available rooms. Total revenue should fall between $138 billion and $140 billion, an amount that is 4 to 5 percent greater than last year.

Print Get the Mag Weekly Updates