Hotel Occupancies…
Hotel Occupancies bounce back in North America … can the same be said for hotels located in other destinations?
MINNEAPOLIS — If you’ve been booking hotel rooms in North America for clients, you will have noticed that a year ago, in December 2009, hotel occupancy levels began to show signs of recovery.
But they still remained low averaging just 44% resulting in low rates and few problems finding rooms.
But as we head into 2011, occupancy and rates are on the rise across the board, according to Carlson Wagonlit Travel’s quarterly client publication, CWT Vision. Is this due to increase in business travel, more ‘staycations’ this past summer or other factors? Will these results trickle through to other destinations? Industry watchers are certainly hoping the trend will continue and are betting the next destination to feel the rise in occupancy and rates will be Europe.
In December 2009, San Francisco’s occupancy rate was 59%, Chicago’s was 45%, Los Angeles’ was 56%, Montreal’s was 67%, and New York City, typically sold out during the holiday season, was 80%. As of October 2010, these same markets have clearly rebounded.
Today, San Francisco boasts a 90% occupancy rate, while Chicago is at 73%, Los Angeles has climbed to 74%, Montreal reports 75% and New York reports 86%. In North America, overall occupancy is at 65%, up 21% in the last nine months.
Toronto and Vancouver maintained relatively high occupancies just under 80% throughout the period.
Industry analysts project this increase to continue through 2011. While this is good news for hoteliers and business travel more broadly, it also means buyers will be challenged to effectively manage a hotel program as rate increases are sure to follow.
In addition to increasing occupancy and near-term rate increases, buyers may be facing a tough negotiating environment for 2011, as hoteliers expect continued rising demand along with a declining growth in supply, as the pipeline for new hotel construction dwindles.
According to PricewaterhouseCoopers, the U.S. hotel industry had 133,000 rooms under construction in 2008.
That number fell to 47,000 in 2009 and was down to an annualized 32,000 rooms by the second quarter of 2010.
According to Smith Travel Research, the story in Canada is similar. The Canadian hotel pipeline reported 22,363 rooms in October, a decrease of 8.6% compared to September 2009.
With increased demand, rising rates, and dwindling supply, buyers will need to plan on making some adjustments for the 2011 negotiation season, said CWT.
Let’s hope that the increased demand will spill over into other popular destinations! Courtesy of Travelweek, November 22, 2010
Travel Marketing Solutions is your Canadian sales and marketing expert. Based in Canada but understanding the needs of the international partner. 
