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Summer update 2: Continued, gradual improvement
July 24 2009

June/July data shows small improvements; summer locations are mixed; and no surprises, hotels near beaches perform the best.

By Steve Hood
Senior VP, Research, STR

HENDERSONVILLE, Tennessee—June numbers were released this week, and they showed small improvements from what we’ve seen for most of the first half of 2009. The total U.S. revenue per available room percent change improved just a bit to -18.6 percent. In May, the number was -20.4 percent; in April, it was -19.5 percent; and in March, it was -20.0 percent. The June occupancy percent change showed even more improvement and moved to -9.7 percent for the U.S. In May, this number was -11.8 percent; in April, it was -11.1 percent; and in March, it was -11.6 percent. Therefore, June was the first month in 2009 during which the occupancy percent change moved to single digits, albeit by a small margin.

Daily numbers for the third week of July (12-18 July) also were released recently, and they continued to show small improvements. The RevPAR percent change for last week was -17.5 percent, and the occupancy percent change was -8.9 percent. These numbers still are moving in a positive direction.

The 28-day daily numbers as of last week also were a glimmer of good news. The 28-day RevPAR percent change improved to -16.7 percent—the strongest number we’ve seen since 27 January. The 28-day occupancy percent change improved to -8.4 percent—the strongest number we’ve seen since January 10. And even the 28-day ADR percent change improved to -9.0—the strongest performance since May 18.

Further emphasizing these gradual summer improvements is a look at some of the areas that usually demonstrate the strongest summer performance. These areas are specific STR tracts that normally exhibit a 25-percent or greater variance when you compare their summer occupancy to their nonsummer occupancy. (Read Summer Update 1 article for more information on these tracts and their summer to nonsummer variances.)

Summer (June-July) Performance 2009 vs. 2008
Seasonal tract  Occupancy % change RevPAR % change
Chesapeake/Ocean City, MD -8.8 -12.0
Myrtle Beach North Area, SC 1.5 -7.5
Alaska -13.0 -26.4
Virginia Beach -7.8 -13.0
Fort Walton Beach, FL -3.7 -13.1
Massachusetts SE/Cape Cod -11.0 -14.0
Mount Pleasant/Isle Of Palms, SC -1.6 -8.7
Myrtle Beach & South, SC -6.6 -17.8
Coastal Carolina, NC -6.1 -8.5
Rapid City MSA, SD -2.5 -4.6
Sea World/Oldtown/Airport, CA -10.3 -28.0
Wyoming Area -9.4 -15.7
South Shore/Vineland, NJ 1.1 -10.0
Michigan Northwest -9.9 -12.3
Hilton Head/Beaufort, SC -2.0 -9.9
Upstate New York -11.5 -18.5
Maine South/Augusta -13.2 -17.4
Sandusky/Port Clinton, OH 6.7 -5.1
Santa Barbara/Santa Maria MSA, CA -10.4 -17.8
Harrisburg/Hershey, PA -11.9 -14.2
North Shore, NJ -4.8 -13.0
Newport Beach/Dana Point, CA -14.2 -29.4
San Diego/La Jolla, CA -9.0 -30.0
Maui Area, HI -1.9 -25.0
Massachusetts North/West -5.5 -12.8
Latham/Saratoga Springs, NY -12.9 -17.0
Maine North/Bangor  -16.0 -21.3
Delaware Area 5.8 2.7
Panama City MSA, FL 1.4 -5.8
Colorado Springs S/Airport -1.0 -11.9
Idaho North -8.6 -15.6
Wilmington MSA, NC -6.6 -13.9
Montana Other Areas -1.8 -5.2
Monterey/Salinas MSA, CA -9.9 -19.3
Santa Cruz/Other San Jose, CA -11.5 -17.5
Kaanapali/Lahaina/Kapalua, HI -0.2 -22.2
Portland, ME MSA -14.8 -22.0
Total US -9.8 -18.3
Source: Smith Travel Research

Five of the 37 seasonal areas are experiencing positive occupancy growth compared to last year, including: Myrtle Beach (South Carolina); North, New Jersey South Shore; Sandusky-Port Clinton, Ohio; Delaware Area; and Panama City, Florida. Another nine of these areas are experiencing flat to slightly negative occupancy growth, including:

• Fort Walton Beach, Florida
• Mount Pleasant, South Carolina
• Rapid City, South Dakota
• Hilton Head, South Carolina
• New Jersey North Shore
• Maui, Hawaii
• Colorado Springs (Colorado)
• South Montana other area and
• Maui (Hawaii) other area.

An additional nine areas have occupancy growths better than the national average, including: Ocean City, Maryland; Virginia Beach, Virginal; Myrtle Beach (South Carolina) South; North Carolina Coast; Wyoming Area; San Diego, California; Massachusetts North/West; Idaho North; and Wilmington, North Carolina. So altogether, 23 of the 37 seasonal tracts are experiencing occupancy growth better than the national average. Unfortunately though, 14 are below the national average.

There’s a similar mixed bag when it comes to RevPAR growth. The Delaware Area, which includes the beaches, has the distinction of being the only seasonal tract with a positive RevPAR percent change. Eight other areas have a low (single-digit negative) RevPAR growth, including:

• Myrtle Beach North
• Mount Pleasant
• North Carolina Coast
• Rapid City
• Hilton Head
• Sandusky-Port Clinton
• Panama City and
• Montana area.

Another 18 areas are experiencing a moderate (double-digit negative but still below the national average) RevPAR growth, including:

• Ocean City
• Virginia Beach
• Fort Walton Beach
• Massachusetts Southeast/Cape Cod
• Myrtle Beach South
• Wyoming area
• New Jersey South Shore
• Michigan Northwest
• Maine South/Augusta
• Santa Barbara/Santa Maria, California
• Harrisburg/Hershey, Pennsylvania
• New Jersey North Shore
• Massachusetts North/West
• Latham/Sarasota Springs New York
• Colorado Springs South
• Idaho North
• Wilmington, North Carolina and
• Santa Cruz, California

Only 10 areas have a RevPAR growth below the national average.

It looks like the beach areas are among the biggest winners when it comes to the seasonal areas, with Atlantic Coast looking the best followed by the Florida Panhandle and California. But, unfortunately, the report is mixed, and there are many of these seasonal areas that aren’t experiencing a much-hoped-for rebound. We’ll continue to track the summer numbers to see if they continue to improve and if the rate of improvement increases from the current slow pace.

In the next article, we’ll also look at tracts experiencing the best summer so far and analyze tracts experiencing the biggest variance this summer compared to the beginning of the year.

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