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Smith Travel Research (STR) announced 1997-second quarter and first half results for the U.S. lodging industry today.

Second quarter 1997 industry occupancy was 68.0 percent, a decline of 0.7 percent versus the same period in 1996. Average room rate gained 6.5 percent to $74.15 in the quarter and revenue per available room (REVPAR) --- the combination of occupancy and average room rate and a key industry productivity measure --- increased nearly 6 percent to $50.45.

The occupancy decline was the industry ís first second quarter occupancy decrease since 1992.

Industry room supply (roomnights available) increased by over 3 percent in the quarter, significantly higher growth than the under 2 percent supply growth in second quarter 1996. Demand growth (roomnights sold) increased 2.3 percent, down slightly from second quarter 1996 demand growth. Room revenue grew almost 6 percent in the quarter, a decrease of over 1 percentage point versus the same quarter 1996.

In the first half of 1997, industry occupancy fell 0.8 percent to 64.1 percent and average room rate grew 6.6 percent to $74.50. REVPAR gained about 6 percent to $47.75. First half industry occupancy fell for the first time since 1991.

Industry room demand grew 2.3 percent in the first half, identical to the demand growth rate in the first half of 1996. Room supply increased 3 percent, accelerating from supply growth of under 2 percent in first half 1996.

Among the top twenty-five U.S. markets, the New York metro area was particularly strong in the first half of 1997. Demand increased nearly 4 percent versus prior year and occupancy reached nearly 79 percent. Room rates increased over 12 percent and hit nearly $160, the highest absolute room rate among the top twenty-five markets. Revenue per available room gained nearly 15 percent. San Francisco occupancy reached almost 78 percent on demand growth of over 5 percent coupled with virtually no room supply increase. Room rates grew more than 12 percent.

"Room supply growth increased significantly in the first half of 1997 while demand growth was flat compared with same period in 1996," said Randell A. Smith, CEO of Smith Travel Research. "At this stage of the industry's recovery, demand growth can be volatile from month to month. For full year 1997, we expect flat to slightly lower industry occupancy and moderating room rate growth."

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 hotel owners. The company also tracks lodging industry performance in Canada and Mexico.