Current Market Overview
The occupancy outlook for March 2012 through the end of the year shows a year-over-year increase of 6.2% for the top 25 markets based on group commitments and transient reservations on the books as of early March. Based on forward looking reservations on the books, the average daily rate (ADR) for the same period is ahead by 7.1% as of the same time last year. These year-over-year increases in demand and ADR reflect a continuing positive outlook for 2012.
For the top 25 markets, the group segment occupancy is up 6.3% compared to the same time last year and transient segment occupancy is up 6.1%. It is worth noting that, about 80% of the transient segment bookings are for March 2012 through May 2012 and the remaining 20% for the rest of the year. Within the transient segment, occupancy for business customers (customers booking weekday retail and negotiated rates) increased 5.9% compared to same time last year. Occupancy for leisure customers (customers booking discount and qualified rates) increased 5.4% compared to the same time a year ago.
For the second quarter of 2012, overall committed occupancy is up 5.4% year-over-year for the top 25 markets. This is led by the transient segment which is up 8.1%. Committed occupancy for the group segment is up 4.4% compared to the same time last year. ADR is 7.7% ahead compared to the same time last year. Based on current bookings, the top 25 markets are showing strong revenue per available room (RevPAR) year-over-year increases of 12.2%, 19.1%, and 23.3% for the months of April, May, and June respectively.
Source and Destination Marketing
Business on the books so far indicates a strong outlook for hotel occupancy over the upcoming months. It is also encouraging that the positive outlook is for group, business, and leisure segments of business. However, a strong market outlook does not always translate to good performance for the individual hotel or the portfolio of hotels you are directly responsible for. Also, not all markets may be the beneficiaries of increased demand.
Hoteliers and destination marketers seeking to drive demand to their respective properties and markets can benefit by understanding where the travelers are coming from. Strong source markets for your destination can yield excellent response to campaigns and, other desirable source markets can be developed through targeted marketing. Key requirements for effective marketing campaigns are – targeting campaigns based on where travelers are coming from (or not coming from) and measuring the results of the campaigns. A systematic approach that is based on these key requirements can ensure that marketing dollars are prioritized to address the right source/destination markets and ensure the best possible return on the marketing investment.
The following table shows the top 10 source markets for travelers and a sub-set of their destinations.
A matrix of source and destination markets for historical and future arrival periods, such as the above, provides us with key insights on where travelers are coming from. In order to drive demand and share, each destination has source markets that can be further developed (e.g. circled in red) and source markets that may support further penetration (e.g. circled in black). Deeper analysis can provide further insights on weekend vs weekday, LOS, customer segment, and specific properties to target very specific results.
Moving the needle on thousands of room nights can be a significant performance driver and targeted marketing campaigns can help you achieve that.
The chart below shows the year-over-year position by market of committed occupancy, reserved occupancy, ADR, and RevPAR, based on business on the books for the future 12 months. Committed occupancy is group blocks plus transient reservations. Reserved occupancy, ADR, and RevPAR are based only on reservations (group pickup and transient reservations). Shades of green indicate performance better than the market average. Shades of orange/red indicate performance worse than the market average.
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Information in this newsletter covers the top 25 markets in North America and is based on data supplied by brands participating in TravelClick's MarketVision Demand Position reporting.