Smith Travel Research (STR) announced first quarter 1997 results for the U.S. lodging industry today.
Industry occupancy reached 60.2 percent, a decrease of 0.2 points versus first quarter 1996; average room rate grew about 7 percent to more than $74. Revenue per available room (RevPAR) --- the combination of occupancy and average room rate and a key industry productivity measure --- grew 6.4 percent to just under $45 in first quarter 1997.
Driven by limited-service hotel construction, industry room supply increased 3 percent in first quarter 1997. Industry demand grew 2.7 percent in the quarter, an increase from the 2.1 percent demand growth in first quarter 1996. Continued aggressive pricing in the first quarter pushed industry room revenue ahead nearly 10 percent. For the twelve months ended in March 1997, occupancy declined slightly to 65 percent while RevPAR growth exceeded six percent.
In March 1997, occupancy fell 1.5 points to 65.3 percent while room rates grew by nearly 6 percent to $75.41. March RevPAR increased 3.5 percent to $49.24. Room supply increased 3 percent versus March 1996 while room demand grew 0.6 percent. March room revenue gained 6.5 percent.
"While the occupancy decline in March was unusually sharp, industry room demand remained strong. Room supply growth, however, has become an increasingly influential factor in the occupancy equation", said Randy Smith, CEO of Smith Travel Research. "On a twelve month moving average basis, the most recent twelve month period was the first time since June 1992 that room supply growth exceeded room demand growth. Although this merits attention, industry occupancy and average rate remain at historically high levels. Our 1997 expectations for stabilizing industry occupancies and continued profit improvement remain unchanged."
Smith Travel Research--- the leader in lodging industry tracking and
analysis --- provides regular industry reporting to all major U.S. chains,
many independent hotels and a variety of management companies and owner
groups. The company also tracks lodging industry performance in Canada