U.S. And Europe-Based Hotels Took a Big Hit in RevPAR

With the latest industry data being analyzed, it was revealed that the hotel industry took a sharp decline in RevPAR last April 2009 according to the Smith Travel Research. Even as the financial markets stabilize and the overall economy gain momentum, the hospitality industry is taking its time to respond.

The data revealed that all four major regions including Europe, Asia Pacific, the Middle East, and the Americas suffered from double-digit decreases in all fronts. From their occupancy level to their revenue per share (RevPAR), everything was down compared to 2008.

These revelations are not surprising at all for an industry that’s reeling from the effects of the economic downturn. Almost every known strategy is being implemented to increase hotel sales and boost profitability even during the trouble times. Some hotels are resorting to price cuts while some are focusing more on their hotel revenue management endeavor. Whatever the case, it is clear that the path to recovery will not be easy given this data.

In the Americas, occupancy declined by 11.3%. It now stands at 56.5%. The bad news doesn’t stop there because the average daily rate also declined by 10 percent. Meanwhile, RevPAR which is an important indicator of a hotel’s financial health, dropped by 20 percent as well. Now, hotel revenue managers need to determine what they should do with this inventory. It is the only way to maximize hotel profits.

In London, the same grim situation is happening. RevPAR has dropped by 9.7% in the capital, London, while it declined by up to 14.6% in the nearly provinces. It is apparent that the city experienced a drop in occupancy rate and average room rate as well. But the situation is not as bad in the United Kingdom as it is in the United States at this point. Occupancy is still at 71.4%. It is only a question of whether this rate can be sustained or improved.