29 Jun, 2009
Hotel Occupancies Falling Worldwide
With a few exceptions, hotels worldwide are reporting significant decreases in occupancies, average daily rates (ADR) and revenue per available room (RevPAR) with major tourism destinations like Bangkok, Phuket, Dubai and New York among the worst hit, according to STR Global, a lodging industry benchmarking and research company.
The company’s statistical comparative analysis figures for May, released last week, show that hotels in the Asia/Pacific region experienced double-digit decreases when reported in U.S. dollars. In year-over-year measurements, Asia/Pacific region’s hotel occupancy in May dropped 14.9% to 55.4%; average ADR declined 15.2% to US$117.86; and RevPAR fell 27.9% to US$65.26.
Bangkok fell in occupancy 37.3% to 41.8%, reporting the largest decrease in that metric. Phuket followed with a 32.1% decrease in occupancy to 34.5%.
“Occupancy levels dropped the most within the Asia/Pacific region for May and in the year-to-date numbers of any region”, James Chappell, managing director of STR Global, was quoted as saying. “While Europe, Americas and Middle East/Africa regions are experiencing a slowdown in the rate of decline, the same cannot be said in Asia.
“Some of the lowest levels of occupancy—under 50%—were reported in Bangkok, Beijing, Phuket and Shanghai, as the markets suffered from post Olympic boom and oversupply. Other areas, like Thailand, are suffering because of the uncertain economic climate.”
On the positive side, Mr Chappell added, “Brisbane, Melbourne, Seoul and Sydney reported the highest levels of occupancy—over 70%—for May from the 17 markets tracked by our Asia/Pacific Hotel Review.” Brisbane reported the smallest occupancy decrease, falling 2.1% to 77.3%.
Three markets reported ADR increases: Bali (+18.5% to US$127.83); Tokyo (+12.9% to US$228.55); and Osaka (+8.7% to US$129.72). Mumbai reported the largest ADR decrease, dropping 35.6% to US$164.66. New Delhi followed with a 31.0% decrease in ADR to US$162.02.
Bali was the only market to increase in RevPAR for May, rising 10.8% to US$88.79. Five markets reported RevPAR decreases of more than 40%: Bangkok (-48.4% to US$36.36); Phuket (-47.6% to US$25.80); New Delhi (-44.8% to US$81.48); Beijing, China (-43.8% to US$45.54); and Mumbai (-40.3% to US$92.37).
The situation was slightly better in the Middle East/Africa region where occupancy dropped 11.5% to 63.1%; ADR decreased 6.1% to US$145.67; and RevPAR decreased 17.0% to US$91.99.
Two markets reported ADR decreases of more than 25%: Dubai, (-30.3% to US$211.41) and Istanbul, (-26.4% to US$211.06). Three markets reported RevPAR decreases of more than 25%: Dubai (-40.4% to US$140.65); Istanbul (-36.3% to US$148.87); and Muscat (-28.6% to US$116.22). Muscat was down in occupancy 23.7% to 52.1%, reporting the largest decrease in that metric.
According to Mr Chappell, “Although they have seen some spectacular year-over-year decreases, the Middle East/Africa region is still very strong compared with the other global regions. The region has the lowest RevPAR decline and the highest actual RevPAR for May and the year-to-date May, compared with Asia/Pacific, Americas and Europe. The market has fallen 17%, posting US$92 RevPAR for the month and US$100 RevPAR year-to-date, as hotels kept their average room rates higher in the face of a strong drop in demand.
He said that political stability in Kenya and Lebanon has seen the hotel market come back strongly with 82% and 144% RevPAR increases year-to-date. Jeddah, Abu Dhabi and Amman also bucked the trend and reported RevPAR increases for the month and year-to-date
Beirut reported the largest increase in both occupancy (+148.4% to 71.4%) and RevPAR (+194.6% to US$118.89). Beirut also saw a double-digit increase in ADR, up 18.6% to US$166.40. Occupancy in Jeddah rose 5.5% to 71.4%. Amman experienced the largest increase in ADR, rising 21.6% to US$162.22.
The Americas region (including North and South America) also recorded declines in all three key performance metrics. In year-over-year comparisons, occupancy in May dropped 12.2% to 55.7%; ADR dropped 10.3% to US$98.47; and RevPAR dropped 21.2% to US$54.83.
Four markets reported ADR decreases of more than 20%: New York, (-29.4% to US$201.13); Mexico City (-25.2% to US$96.52); Toronto (-24.9% to US$118.68); and Buenos Aires (-24.2% to US$133.55).
Four markets reported RevPAR decreases of more than 30%: Mexico City (-70.2% to US$22.95); Buenos Aires (-45.7% to US$67.28); Toronto (-36.4% to US$75.31); and New York (-35.7% to US$159.82).
In Europe, the hotel industry posted mixed results with results ranging from double-digit losses to single-digit gains, depending on the market and the currency used for comparison.
“Europe’s troubles can be found in the fall of average room rates”, said Mr Chappell. “In U.S. dollar and euro terms, the region reports the highest drops in ADR for the month and year-to-date May compared to Asia/Pacific, the Americas and Middle East/Africa.
Frankfurt reported the largest occupancy increase, rising 7.6% to 59.9%. Trade fairs helped Frankfurt to achieve the highest ADR increase of 22% for the 40 markets tracked. Frankfurt also reported the only RevPAR increase, up 31.7% to EUR68.55.
Seven markets experienced RevPAR decreases of 30% or more: Moscow (-49.7% to EUR101.15); Düsseldorf (-41.5% to EUR41.52); Madrid (-36.4% to EUR61.15); Budapest (-34.4% to EUR45.48); Prague (-33.2% to EUR59.00); Stockholm (-32.8% to EUR77.41); and Dublin (-30.0 to EUR59.17).
Budapest experienced the largest occupancy decrease, falling 21.5% to 60.4%, followed by Geneva, (-21.2% to 58.8%) and Tel Aviv (-21.0% to 71.0%).
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