Group Bookings Brighten Hotel Outlook for 2017

by Kristin Harlow

NEW YORK CITY — Committed occupancy and average daily rates (ADR) for the first quarter of 2017 are showing major signs of growth in the hotel sector. Group travel is leading the way despite the continuing lag in transient booking pace in the fourth quarter of 2016, according to new data from TravelClick’s November 2016 North American Hospitality Review (NAHR).

TravelClick defines a transient traveler as an individual business or leisure traveler. Transient booking pace is the rate by which these travelers book their reservations. Committed occupancy is defined as the sum of transient rooms and group rooms committed divided by capacity.

The November NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by Nov. 1, 2016, from the period of November 2016 to October 2017.

Across all travel segments in the first quarter of 2017, occupancy and ADR are up 6.7 percent and 2.7 percent, respectively. Occupancy for the group segment is up 6.8 percent.

“Even with the slowing transient reservation pace this month, especially within the business segment, hoteliers should look to the New Year for a promising outlook,” said John Hach, TravelClick’s senior industry analyst. “Group occupancy and booking pace in particular are showing notable signs of improvement in 2017, especially within the first quarter.”

For the next 12 months, transient bookings are up 2.7 percent year-over-year, and ADR for this segment is up 2 percent. When broken down further, the transient leisure (discount, qualified and wholesale) segment is showing occupancy gains of 3.9 percent with ADR gains of 2.8 percent. The transient business (negotiated and retail) segment is down 0.8 percent, but ADR is slightly up 1.7 percent. Group bookings are up 3.8 percent in committed room nights over the same time last year, and ADR is up 2.6 percent.

In the third quarter, ADR was up 1.9 percent across all segments, according to the September 2016 NAHR.

TravelClick’s occupancy and ADR data is both historical and forward-looking, based on actual reservations on the books for major hotel chains. Hotels provide TravelClick with their reservation information in real-time, which allows the company to provide forward-looking booking information, as opposed to forecasts.

— Kristin Hiller

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