Despite a softening economy, the outlook for future monthly overall business conditions in the U.S. hotel industry increased during June, according to e-forecasting.com’s Hotel Industry Leading indicator. The indicator increased 0.5% to 103.5 during June, following an increase of 0.6% during May. It was set to equal 100 in 2005.
HIL’s six-month growth rate, which historically has confirmed the forthcoming turning points in U.S. hotel business activity, was 4.1% in June, following a positive rate of 3.6% in May.
The probability of the hotel industry entering into recession in the near-term registered 0.8% in June, down from 0.9% reported in May.
With half the year in the books, it is safe to say the landscape for U.S. hotel investments has changed to some degree, writes Director of STR Analytics Stephen R. Hennis.
As many analysts expected, the pace of acquisitions by real-estate investment trusts slowed through the first half of the year. During 2011, REITs accounted for 35% of hotel deals in the U.S. During the first six months of 2012, REITs acquired only 16% of assets.
Private equity appears to be stepping off the sidelines to fill the void left by REITs. After only accounting for 7% of the deals in 2011, private equity was involved in 16% of the purchases during the first half of 2012.
With the Olympic Opening Ceremony only a day away and 30% room availability still available throughout the London market, hoteliers have slashed prices by an additional 17%, according to a Trivago report. Prices are down from an average of £242 ($379) per night to £201 ($315).
Hotel availability in London during the Olympic period has dropped by 6% in the past 10 days, showing that visitors are booking hotel rooms last minute.
In addition, London hotel searches are up 30% in the week following the Olympics, showing that more people are looking for accommodation after the games. It is likely visitors are keen to absorb the Olympic atmosphere without the inflated hotel prices—although even with the last-minute decreases, prices are still 9% more than this time last year, when the average was £185 ($289).
Research company comScore on Monday released its monthly analysis of U.S. Web activity at the top online properties for June 2012 based on data from the comScore Media Metrix service. The company found that as summer officially began in June, many Americans felt the desire to book travel plans, creating a spike in traffic at ground/cruise, hotels/resorts and other travel subcategories.
Hotel and resort sites ranked among the top-gaining categories in June, growing 8% to more than 37 million visitors. Hilton Hotels came in at No. 1 with 5.5 million visitors, followed by Marriott with 5.4 million visitors, Expedia Hotels with 5.2 million visitors (up 22%) and InterContinental Hotels Group with 4.7 million visitors (up 19 %). Disney Parks & Travel drew 4.2 million visitors (up 9%), while Starwood Hotels and Resorts grew 30% to 3.3 million visitors.
Weekly U.S. unemployment claims decreased by 35,000 to 353,000 on a seasonally adjusted basis for the week ending 21 July, according to the U.S. Department of Labor.
The four-week moving average decreased by 8,750 to 367,250. The advance seasonally adjusted insured unemployment rate was 2.6% for the week ending 21 July, unchanged from the prior week's unrevised rate.
Compiled by Stephanie Wharton.