Hotel location types show range of success

HENDERSONVILLE, Tennessee--STR has categorized hotels into six different location types. The urban group contains the largest hotels (average size more than 150 rooms) with the highest average daily rates (more than US$150). Although there are less than 5,000 hotels in this group, they are responsible for the second largest amount of revenue (nearly US$17 billion in 2008).  The suburban group contains the largest number of hotels (nearly 17,000) and rooms.  Although the average size is 100 rooms and the ADR is under US$100, this group is responsible for the largest amount of revenue (nearly US$33.5 billion in 2008). 

The airport category contains the smallest number of hotels (just more than 2,000) with an ADR just over US$100 and an average size of 140 rooms. This group earned just more than US$7 billion in revenue in 2008. The interstate group consists of more than 7,000 hotels with the lowest ADR (just more than US$70) and the second lowest room size (less than 70).  They were responsible for the lowest amount of revenue (just above US$6.6 billion). 

The resort category consists of more than 3,700 hotels with the second highest ADR (US$145) and the highest average number of rooms (just under 160). These hotels were responsible for the third-highest revenue (over US$19 billion in 2008). The small town group contains the second largest number of hotels (more than 15,000) with the lowest average room size (less than 60 rooms) and the second-lowest ADR (just above US$80).  They were responsible for nearly US$15 billion in revenue in 2008.

Location type overview yeaere-end 2008: 

During 2007, the urban Location category clearly outperformed the other categories. This group enjoyed a significant annual RevPAR percent change of 8.6 percent, fueled by a high ADR percent change of 8.3 percent and a positive occupancy growth of 0.3 percent. In 2007, the airport category had the second highest RevPAR growth of 6.6 percent, fueled mainly again by an ADR change of 6.4 percent and a positive occupancy change of 0.1 percent.

For 2007, the interstate and small town Location categories shared the third highest RevPAR change of 5.6 percent, with similar ADR growth (interstate was 5.5 and small town was 5.3) and similar positive occupancy growth (Interstate was 0.2 and Small Town was 0.3).  In 2007, the resort group had the lowest RevPAR percent change of 4.6, with a 5.4 ADR growth, but unfortunately a -0.7 occupancy growth. The suburban category experienced the second lowest RevPAR percent change in 2007 (4.7 percent) with an ADR growth of 5.8 percent, but the lowest occupancy growth of the year at -1.0 percent.

2007 location type annual percent change (year-over-year):

The changes in 2008 came in the middle ground where the small town category jumped to the second highest RevPAR position of 0.1 (the only other positive number), with an ADR percent change of 3.4 and an occupancy percent change of -3.2.  The interstate group maintained the third highest RevPAR of -0.3 (almost flat) with a 4.4 percent ADR growth and a -4.6 percent occupancy growth. The airport category dropped from second position to fourth position with a RevPAR percent change of -2.2 (ADR growth of 2.1 percent and Occupancy growth of -4.2 percent).

2008 location type annual percent change (year-over-year):

In 2009, there will definitely be more changes when it comes to the performance of the location types. If you look at the running three-month numbers as of December 2008, you notice some significant differences. The urban category dropped to the second lowest RevPAR position into negative double digits at -10.1 (ADR growth of -3.1 and Occupancy growth of -7.1). The suburban and airport location categories are very close to urban. Suburban has the third lowest RevPAR percent change of -9.8 (ADR growth of -1.2 percent and occupancy growth of -8.8 percent) and airport has the fourth lowest RevPAR percent change of -9.6 (ADR growth of -2.6 percent and Occupancy growth of -7.2 percent). The resort location type still has the lowest RevPAR growth of -14.1 percent (ADR growth of -3.9 percent and occupancy growth of -10.8 percent).

The big winners when it comes to starting 2009 are the small town and interstate location categories. The small town group had the best running three-month RevPAR growth in December 2008 at -4.4 percent with the second best ADR growth of 1.9 percent and the highest occupancy growth of -6.1 percent. The interstate category had the second best RevPAR percent change (close to small town) at -4.5 percent with the highest ADR growth of 2.8 percent and the second best occupancy growth of -7.0 percent. 

Running 3-month percent change as of December 2008: