Summer sees more drive-to demand
 
Summer sees more drive-to demand
28 JUNE 2013 6:03 AM

Many metrics point to increased growth during this summer travel season.

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The sweltering heat roasting my native Cleveland during the past few weeks belies the fact we’re only a week into summer. It feels like we’ve been at it for ages now. Schools have been out for a month, baseball season is nearly at the halfway mark and the luring jingles of the ice-cream truck have become a permanent sunset lullaby in my neighborhood.

U.S. hoteliers are finding their summer strides as well. Though occupancy has remained largely flat, albeit at an impressive 65%-plus, a shift toward more leisure travel has prompted widespread gains in both average daily rate and revenue per available room.

During May—which begins the unofficial summer travel season—hotels in the top 25 U.S. markets recorded increases of 4.1% and 5.7% in ADR and RevPAR, respectively. All other markets saw respective gains of 3.1% and 4%, according to STR, parent company of HotelNewsNow.com.

For the running 28 days ending 22 June, the overall U.S. hotel market recorded an ADR uptick of 3.2% and a RevPAR increase of 3%.

More good news is on the way. STR’s summer forecast, which comprises June, July and August, predicts a 1% increase in occupancy to 70%, a 4.4% increase in ADR to $112.21 and a 5.4% increase in RevPAR to $78.50.

A recent survey from Choice Hotels International and “FamilyFun” magazine revealed that more than four out of five respondents (83%) said they plan to take an overnight leisure trip of more than 100 miles roundtrip this summer, up from last year’s survey (78%). The majority of these travelers (53%) expect to take two or more leisure trips this summer.

The study, which surveyed 1,200 American adults as well as a statistically projectable target sample of more than 500 families that plan to travel with children ages 3 to 12 years, also revealed a return of the great American road trip. Fully nine in 10 respondents (90%) planning summer holiday trips will make the journey by car.

The picture gets a bit muddier overseas. During May, Europe saw a 2.6% bump in occupancy but tepid movement in both ADR (-1.9%) and RevPAR (+0.6%) in euro terms, according to STR Global, sister company of HotelNewsNow.com.

Some bright spots remain. Slovakia, for instance, saw occupancy jump 14.6% during the month to 61.7%. Hungary (+13.3%) and Lithuania (+11.1%) also posted healthy occupancy increases.

The United Kingdom, meanwhile, is mirroring the United States in some interesting ways. Although the country is seeing stronger demand numbers (occupancy during May was up 3.8% to a whopping 78.4%) and weaker ADR (+0.9%) in local currency, RevPAR growth was at a comparable 4.7%.

And a recent analysis by hotel comparison website Trivago found a similar rise in domestic, drive-to travel. Of the top 50 most popular destinations for travelers in the region, 16 were located within the U.K. That’s a sharp increase from last summer, when only two U.K. destinations (London and Blackpool) featured in the top 50.

London has moved from the 10th most popular destination during the summer of 2012 to the most popular destination during summer 2013. Other U.K. destinations in the top 20 this year are Edinburgh, Manchester, York, Liverpool, Brighton and Glasgow.

So what does this all mean? The summer holiday is alive and well, for starters. The travel patterns also suggest reductions in regional air capacity combined with higher costs for what routes remain are pushing more domestic and drive-to travel in certain regions.

As long as occupancy remains steady, the heat wave should continue.

Now on to the usual goodies …

Stat of the week
2.4%: Increase in global-distribution-system corporate hotel bookings during May, according to Pegasus Solutions. Rates, meanwhile, declined 0.2%.

Quote of the week
“Penny is a proven leader, a successful entrepreneur and one of the most accomplished and highly respected women in business today.”
—U.S. President Barack Obama in a statement after Hyatt heir Penny Pritzker was confirmed as the next U.S. Commerce secretary.

She won handedly with a 97-to-1 vote.

Reader comment of the week
“rate parity will die soon!!”
Reader “alflop” sharing a heartfelt (note the exclamation marks) declaration about rate-parity practices in response to an article on the future of revenue management.

Email Patrick Mayock or find him on Twitter.

The opinions expressed in this blog do not necessarily reflect the opinions of HotelNewsNow.com or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.

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