Early occupancy numbers call for positivity in 2016

Expectations of high occupancy numbers for 2015 began to surface in the first quarter of last year, and the industry's optimism is currently such that many analysts had begun to call for an exceptional guest turnout for 2016 before the holidays had finished. Now, hotels are charging into 2016 with high hopes after last year's forecasts proved true, with early numbers lending credence to the positivity.

New York City, a gushing faucet of occupancy, welcomed more visitors than ever before for the sixth consecutive year. Crain's New York Business reported that an estimated 58.3 million people visited the city in 2015, with domestic travelers consisting of as many as 46 million of them. On top of that, 33.7 million hotel roomnights were sold last year, in spite of claims that Airbnb has swept away as much as $2.1 billion in revenue from hotels.

Elsewhere in the country, similar scenarios played out. According to the Portland Press Herald, downtown Portland, Ore., experienced a red-letter year with hotels in the city reporting an occupancy average of 70 percent last year, leaping above the state's average of 56.7 percent. 

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For comparison, the average occupancy in the U.S. remains around 66 percent, with recent data from STR showing a 1.7-percent increase in occupancy to reach 65.6 percent for the end of 2015. Average daily rates are also on the rise, up 5.5 percent to $120.01, while revenue per available room increased 6.3 percent to $78.67. According to the Tampa Bay Business Journal, Tampa-St. Petersburg saw the largest rise in ADR in the U.S. for December 2015, increasing 8.2 percent to $105.54.

These numbers fly in the face of claims that increased room supply to the area would negatively impact both occupancy and rate, a situation that did not come to pass. This fear is permeating tier one markets with a large pipeline of rooms on the way, such as New York. But with a swath of openings around the corner, the industry won't have to wait long to find out just how each market will fare.

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