Demand. Booking pace. Transactions. While improvement in each suggests recovery is on its way in the global hotel industry, the good news isn’t limited to just these three. While being interviewed for this report, hoteliers also pointed to these four other bellwethers of growth:
1. RevPAR
Revenue per available room and demand certainly go hand in hand, but a number of sources interviewed for this report singled out the former as a definitive sign of recovery.
“An increase in RevPAR remains the ultimate metric,” said Ken Greene, president of the Asia/Pacific region for Wyndham Hotel Group.
Hotel RevPAR performance (April 2010, year over year; US$)
| |
RevPAR |
% change |
| Total U.S. |
US$57.06 |
+3.5% |
| Americas |
US$58.53 |
+4.7% |
| Asia/Pacific |
US$84.96 |
+26.4% |
| Europe |
US$78.44 |
+8.7% |
| Middle East/Africa |
US$106.79 |
+1.4% |
Source: STR and STR Global
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|
Arthur de Haast
global CEO
Jones Lang LaSalle Hotel
|
“You’ve got improving RevPAR, particularly in many markets where hotel owners have had to cut and control costs in view of declining RevPAR,” said Arthur de Haast, global CEO of Jones Lang LaSalle Hotels. “That means there’s going to be pretty strong flow through of revenue to the bottom line.”
In its first-quarter earnings release, InterContinental Hotels Group reported positive RevPAR growth for the first time in 18 months—up 0.2 percent for the first quarter and up 4.1 percent during March.
“This is encouraging and continues to give us reason to believe our prospects remain very good,” the company said.
The prospects have been good for Best Western International since February, when the company began experience steady increased in demand and RevPAR, said David Kong, the membership company’s president and CEO.
2. Consumer confidence
A consumer without confidence is like a car without wheels. Neither is going anywhere.
During times of economic uncertainty, it’s not surprising that consumers hunker down and saving rates skyrocket. But for the industry to get back on its feet, it needs travelers to spend those hard-earned bucks on the open road.
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|
Tom Hewitt
chairman and CEO
Interstate Hotels & Resorts
|
Fortunately for U.S. hoteliers, the Consumer Confidence Index has posted three consecutive monthly gains in the U.S. Its latest reading in May stood at 63.3, up from 57.7 in April. (The index was set to 100 in 1985.)
“When the recession really began … people seemed to stop traveling because they were afraid of the future,” said Steve Rudnitsky, president and CEO of Dolce Hotels and Resorts. “What we’re seeing now is people starting to come back, and consumer confidence is starting to come back , and as a result, so is demand.”
3. GDP
Real gross domestic product, or GDP, has long been a barometer of overall economic health, but it’s just as applicable to the hotel industry, said Tom Hewitt, chairman and CEO of Interstate Hotels & Resorts.
