Posted on 05/31/2015 10:14:09 AM PDT by SeekAndFind
Want a sign that the economy is doing fine? Look no further than the hotel industry.
First flagged by Bill McBride at Calculated Risk, in April all of the major metrics measuring the hotel industry hit all-time highs.
Via Jan Freitag at HotelNewsNow:
April had the highest occupancy ever (66.8%) and the highest room demand (99.4 million rooms) ever.
This pushed annualized occupancy (measured as a 12-month moving average) up to 65%.
What does this mean? All key performance indicators (rooms available, rooms sold, revenue, average daily rate, occupancy and revenue per available room) are still at all-time highs.
The broader economic takeaway is simple: If people are moving around the country, be it for leisure or business, the economic engine is still humming along.
In his report, Freitag also noted that April was the 62nd-straight month that RevPAR, or revenue per available room, increased. What this measure means, most simply, is that hotels are getting more money for each of their rooms, whether via price increases or because each room is booked more often. And right now, it appears the latter is the case.
In his report, Freitag writes, "Demand was 3 million rooms higher than last year, and supply was only 1.7 million roomnights higher. Ultimately that will change and the industry will sell less new rooms than build new rooms, but we do not expect that to happen until 2017."
(Excerpt) Read more at businessinsider.com ...
Is it really that simple?
I'm not buying it. I live in a middle-class neighborhood and rarely hear of folks going to upper-scale hotels. In fact, one of our 4 star hotels is struggling to keep out of bankruptcy.
With this statistic its a yes and no answer. Hotel bookings are a sign people are traveling but its not saying they’re all Americans. The statistic needs to be broken down. Its unquestionably good for that industry though.
It would be interesting to plot the number of business trips each year for the past 50 years.
In general there would be a rise and fall as the economy boomed and busted but we might see a dip when people tried to save costs by doing teleconferencing, and then a rise when people realized it just doesn't work.
The dirty little secret in the hotel business is that virtually nobody actually pays full “rack” rate. The industry followed the airline model and stopped expanding so that they could yield rate more efficiently. While there are “evergreen” markets like Manhattan and some of the resort areas during busy seasons (winter in Florida, summer in the coastal areas along the east coast), if you set those aside, 68% occupancy is nothing to brag about. Hotels are discounting and using the online travel agencies (OTAs) like never before to put heads in beds every night. The difference between what a hotel asks for on their own website and what they’ll accept through Priceline is stunning and shows the fine line between “robust” and marginal. The “expanding economy” is bogus and on the brink of collapse.
Does this include People who LIVE in seedy Motels because they can’t afford to Rent an Apartment?
Hotels are giant Petri dishes where cooties cultures flourish...
And the greedy hotel industry hires millions of illegals.
I really dislike hotels and refuse to stay in one.
Occupancy was also only a few points lower in 2009 IIRC.
Dear Myles: if the number of rooms continue to decrease, the average occupancy rate per hotel will increase. Oh, btw, what was the industry's net profit after takes over the same period?
Never mind.
5.56mm
Farking spell check. Or, I type with fists...
5.56mm
So what do you do? Sleep on the side of the road?
5.56mm
” The statistic needs to be broken down.”
Wall St. Hookers are responsible for what? 90% of the increase?
I don’t know where the data is coming from, but hotels actually are doing very well right now, based on my visual survey. We’re building a lot of them in my (tourist) town.
Part of it is delayed development. I think things had dropped so low under Obama that nobody had any hope, but he’s on his way out now and optimism is picking up.
Also, a lot of people have switched to hotels for a nice stay in a place. Hotels have changed their model and become more customer friendly, because they’ve been challenged by everything from B&Bs to VRBO. So what they’re offering now is a reliable stay with reliable facilities ... and you don’t have to carry your own luggage up some creaking stairs and then go down the next day and chat with your “host” and a bunch of total strangers at breakfast.
Article is full of it. There’s a Days Inn near me that’s full, full of section 8 welfare mommies.
OK well now everything is back on track. I can rest easy. :-)
I think this report is simply “bullshit.”
Where is the breakdown of the types of guests? How many work directly for the government? What % are there conducting some type of work caused by government regulations? What % of guests are paying for meals, lodging and entertainment with money that came from the hands of taxpayers.
And...last, but not least, what % of guests were ordinary citizens on private trips, paid for by private money and for vacations or business that was not related to government (or caused by government regulations) in any manner.
I think the number will be very low.
How about the huge blocks of hotel rooms being rented by the Feds to house "undocumented immigrant children" and their extended families?
It just might be that with the lower gas prices, more people planned vacations this spring.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.