Report: ADR growth a mixed bag for North American hoteliers

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Average daily rate is showing uneven performance for North American hoteliers, according to TravelClick’s most recent North American Hospitality Review.

According to the data, ADR is down 0.8 percent based on reservations currently on the books for 2019. Meanwhile, group ADR is up 0.6 percent, while transient segment ADR is down 1.2 percent compared to the previous year. Transient business ADR is down 2.4 percent, while transient leisure is up 0.5 percent.

Source: TravelClick

Even so, John Hach, senior industry analyst for TravelClick, said the figures are heartening. “For the first time in several months there is consistent and encouraging news for North American hoteliers. This is becoming evident in the group segment outlook, which is demonstrating signs of stability on multiple fronts: growth in year-over-year group bookings, new commitments added over the last month, and most important, an uptick in average daily rate. These statistics are all welcome news, especially considering ongoing geopolitical and economic concerns.”

For the next 12 months (August 2019 – July 2020), transient bookings are down 0.7 percent year over year, and ADR for this segment is down 0.4 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is down 2 percent in bookings, while ADR is up 1.3 percent. Additionally, the transient business (negotiated and retail) segment is up 0.9 percent in bookings but down 0.7 percent in ADR. Lastly, group bookings are up 1.3 percent in committed roomnights over the same time last year, and ADR for this segment also is up 1.4 percent.

Source: TravelClick

“Although the group outlook is positive, there remains ongoing weakness in several areas, most notably throughout the leisure transient segment,” Hach said.

He added that the struggles are due, in part, to new hotel supply and competition with alternative accommodations, which are creating challenges in generating growth in leisure ADR.

“Therefore, it is becoming even more imperative for hoteliers to leverage advance pacing business intelligence and online marketing solutions to attract new leisure guests,” he said.