The RevPAR Recovery Race is an article series that will track the top 26 United States markets in revenue-per-available-room-recovery from the previous cycle’s respective RevPAR peak. After the first month of the RevPAR Recovery Race series from April 2010, we congratulated New Orleans as the Top 26 market leader. The following article will not only highlight the current month (May) recovery leader but also show which market had the best month-over-month growth.
In an effort to recap the April results the following table (sorted alphabetically) establishes the market name, trailing 12-month (TTM) moving average, RevPAR peak and trough and the respective dates of these high and low points. Utilizing the TTM time period helps normalize the data and substantiates a 12-month sustainable growth rather than a unique monthly/seasonal irregularity.
As seen in the previous table, both Orlando and Norfolk-Virginia Beach, Virginia, experienced their RevPAR trough in May 2010 and continue to lag the other markets in their recovery. In the case of Orlando, this lag is primarily attributable to average daily rate, where May TTM ADR fell from US$91.07 to US$90.20. On the other hand, in the case of Norfolk-Virginia Beach, the May 2010 RevPAR low is attributable to occupancy, where the six-year market low occupancy point of 51.7% was experienced in May 2010.
Identical to the preceding month, each market’s respective RevPAR peak is used as the benchmark for its respective recovery; each month I’ll use the current month’s TTM RevPAR versus the peak displayed in the previous table.
The table below details the results of the U.S. RevPAR recovery for May 2010. The table, sorted in descending order, highlights the remaining recovery that each respective market must obtain to reach its pre-recessionary peak. In other words, the lower the percentage, the better that market’s result.
The current U.S. top 26 markets RevPAR recovery leader remains New Orleans.
With only 7.3% recovery necessary to achieve the September 2008 peak, New Orleans remains the U.S. top 26 market leader, with Phoenix still lagging the group with more than 30% recovery to go. As an additional element to the article series, the following table displays the month-over-month gain for each respective market (sorted in descending order).
As seen in the previous table, New Orleans once again takes a sizeable lead with the greatest month-over-month gain, representing a 3.3% RevPAR gain over April 2010 TTM. New York, which is among the market laggards in the overall recovery pace, was the closest behind New Orleans in month-over-month growth. This implies that even though New York is pacing well on a month-to-month basis, there is a substantial gap to regain the mid-2008 peak performance levels. The graph also indicates that most markets only modestly improved since April 2010 with the U.S. top 26 market average of less than 1% TTM RevPAR growth. In addition to Norfolk-Virginia Beach and Orlando, which have yet to hit their trough, Seattle; San Diego; and Miami all took a step backward in the recovery race and found themselves at a lower TTM RevPAR than the previous month. Although the Norfolk market decline was driven by occupancy, the other market declines were driven backward primarily by rate, including Seattle, which experienced a 1% rate decline, and San Diego, which experienced a 0.6% month-over-month rate decline.
Contact me at Orly@stranalytics.com if you need any further information about these markets or would like to see specific market forecasts. Please feel free to post your predictions for the first market to make a full recovery and when. Stay tuned for my posts to watch your markets.