LONDON—Demand is back.
According to Konstanze Auernheimer, director of marketing and analysis for STR Global, global hotel demand returned during the first nine months of 2010 over the same period in 2009. STR Global covers hotel performance outside North America.
“That’s good news because with the demand being there, beds being filled, you get a little bit of pricing power back to the hoteliers globally to certainly push on the (revenue per available room),” she said. “Initially, when we see occupancies improving, it’s kind of the classical recovery. You first see occupancies improving before any of the rate growth comes back.”
Indeed, RevPAR also is improving across all regions. Through the first three quarters of 2010, RevPAR gains (in US$) were:
- Asia/Pacific: 22.75%
- Americas: 5.3%
- Europe: 3.8%
- Middle East/Africa: 3.9%
Source: STR Global
“The one-star region in all of this is Asia/Pacific,” Auernheimer said. “Asia/Pacific came out or bounced back in RevPAR terms in November 2009 and since then has pretty much seen double-digit growth around the 20% mark for pretty much all the months since then until now. There’s some very strong economies there with China, India; a lot of business demand coming back.”
Occupancy increased by 11% and average daily rate increased by 10.5% in September year-to-date figures for Asia/Pacific.
Worldwide ADR, however, is not so spectacular. In absolute terms, rates are still down despite the growth in percentage change terms, Auernheimer said.
“If you compare some of these values to their prior peak levels, we are certainly still down.”
But there are some notable exceptions in Europe in particular: London and Istanbul reached their RevPAR peaks in August 2010 when looking at RevPAR on a rolling 12-month basis.
“It’s amazing that they didn’t fall off in terms of leisure demand and now with business demand coming back,” Auernheimer said. “Weak exchange rates play a role, or the booming economies in some of these markets like Istanbul is an upcoming market. It’s a stable economy and coming back quite strongly.
“Unfortunately, the other markets are still 30% or more off that peak. In Europe, for example, you peer in any of the economic news sections like in Spain, Portugal, Ireland, the usual suspects as such, still suffer more in RevPAR terms as well.”
Europe overall has some positive figures. RevPAR for the continent turned positive during December 2009. Rate and demand also are coming back, according to Auernheimer.
“… Overall the region has performed really well,” she said of Europe. “Just picking out RevPAR and actually now we see demand has come back really strong in Europe, as well as across all the other regions, and we see average room rates as well improving, which we might not have expected so early … compared to the last downturn in 2003 and 2004 … average room rates have improved quicker than the last time around.”
As for the fourth quarter, Auernheimer expected positive growth figures.
“We’re quite positive that … stable recovery which has been so far this year seems to continue now for September and October results, which is very positive because that certainly shows that that recovery is more stable and seems to kind of be able to continue over the next few months.
“It’s a high-risk environment to be in; however, in the moment we feel the recovery should continue for 2011 and that … if no major event happens, we should see more prolonged growth late in 2011, 2012.”
