Hospitality industry welcomes return of business traveler.Marcus & Millichap Real Estate Investment Brokerage Company recently released its National Hospitality Research Report, which indicates that domestic and international travel are on the rise, and corporations are increasing travel budgets. The result of aggressive marketing and pricing has been increased revenue with Revenue per Available Room (RevPAR RevPAR A performance metric in the hotel industry which stands for "revenue per available room." RevPAR is typically calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate. ) forecast to increase by 4.5 percent this year. "This year has marked a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. for travel and tourism," comments Robert B. Hicks Hicks , Edward 1780-1849. American painter of primitive works, notably The Peaceable Kingdom, of which nearly 100 versions exist. , first vice president and national director of Marcus & Millichap's National Hospitality Group. "Business and leisure travel are improving, and, combined with restraint among developers, the industry is poised for a broad, deep expansion." Following are some of the most significant aspects of the report: * Growth in the corporate travel segment holds the key to the future of hospitality. A midyear mid·year n. 1. The middle of the calendar or academic year. 2. a. An examination given in the middle of a school year. b. midyears A series of such examinations. survey of corporate travel managers indicates that more than 60 percent of U.S. Companies increased their travel budgets this year. Corporate travel bookings are expected to total approximately $80 billion in 2004 with some experts forecasting $95 billion in bookings by the end of 2006. * The hotel segment is on track to post a gain in occupancy of nearly 200 basis points, to 63.8 percent. The biggest year-over-year gain in occupancy was garnered in the upscale segment, which experienced an increase of 190 basis points. Broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased improvement in domestic and international travel is expected next year in both the business and leisure sectors. RevPAR is expected to grow an additional 4.4 percent in 2005. * Demand for additional hotel rooms in 2005 is forecast to total 52,000 rooms, while new supply will top out at 28,000 rooms. This imbalance imbalance /im·bal·ance/ (im-bal´ans) 1. lack of balance, such as between two opposing muscles or between electrolytes in the body. 2. dysequilibrium (2). is expected to remain in place through at least the end of 2006. Broken down by segment, upscale and upper upscale hotels account for 38 percent of the construction pipeline. The midprice segment captures the next biggest share with 21 percent. Marcus & Millichap's National Hospitality Research Report also includes brief performance summaries on some of the top U.S. hospitality markets, including New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion