ADR growth softens effects of slipping occupancy

TravelClick estimates occupancy will fall 2.2 percent in Q2 2019. Photo credit: jacoblund / iStock / Getty Images Plus

Dropping occupancy rates continue to offset gains in average daily rate, according to data from TravelClick’s May North American Hospitality Review. Using historical data for April and forward-looking data for May and June, the report estimated that occupancy dropped 2.2 percent in Q2 2019, ADR rose 1.2 percent and revenue per available room fell 1.1 percent.

TravelClick forecasted the steepest overall decrease in the group segment, where a 3.8 percent drop in occupancy and 1.6 percent rise in ADR led to a 2.3 percent slide in RevPAR. The company predicted transient leisure will experience the largest fall in occupancy, 4.4 percent. This was offset, however, by the largest growth in ADR, 2.5 percent, resulting in only a 2 percent drop in RevPAR. In transient business travel, ADR stayed constant and occupancy actually rose 0.8 percent, resulting in a 0.8 percent increase in RevPAR.

Looking at Q3 2019, TravelClick reported a 3.3 percent decrease in committed occupancy and a 1 percent rise in ADR. Both the steepest rise in ADR and fall in occupancy will come from the transient leisure segment, where a 4.8 percent increase in ADR has been met with a 12.3 percent drop in committed occupancy. In the group segment, a 1.8 percent rise in ADR has coincided with only a 0.5 percent dip in committed occupancy.

Virtual Event

HOTEL OPTIMIZATION PART 2 | SEPTEMBER 10 & 24, 2020

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.


For the 12-month period from May 2019 to April 2020, transient bookings are down 4.4 percent year-over-year and ADR is up 1.9 percent. Broken down further, the transient leisure (discount, qualified and wholesale) segment is down 7.9 percent in bookings, but ADR is up 3.2 percent. The transient business (negotiated and retail) segment is down 0.2 percent in bookings and 0.1 percent in ADR. Lastly, group bookings are down 0.7 percent in committed roomnights over the same time last year, and ADR is up 2.8 percent.

“While the 12-month occupancy outlook continues to trend down, there are a number of key metrics showing signs of stability and consistency,” John Hach, a senior industry analyst from TravelClick, said in a statement. “These early indicators lessen some concern over declining occupancy and offers positive news for North American hoteliers. Of particular note is the continued strength of the global distributions systems on track for a record year of worldwide hotel bookings. Our latest projections indicate growth of over 1 million incremental GDS hotel reservations in 2019, generating over 76 million annual hotel bookings for the first time in history.”

Suggested Articles

The project encompassed a real-time, two-way integration between Infor HMS and Glowing’s Digital Engagement Cloud at Mandarin Oriental hotels.

Two upcoming hotels (and one historic property) in sunshine destinations have announced new leaders for their F&B programming.

Many hotel owners will find themselves in the uncomfortable and unfamiliar position of deciding on a course of action for negotiating with their lende