Within just the last few years, virtually all hotel operators were struck with fear by precipitous drops in room demand as travelers weathered the worst recession in a generation.
Now, record demand for hotel rooms is being seen in hotels across the the nation, according to a new study by STR [Smith Travel Research] Global, a leading hospitality research firm.
“Forget location, the name of the game is demand, demand, demand—and the U.S. hotel industry experienced plenty of it during 2011,” the study said.
The Western U.S., in particular, is thriving, according to Smith Travel’s Chad Church, senior director of operations.
“The Pacific—Washington, California, Oregon, Alaska and Hawaii—has been one of the highest performing regions in the U.S.,” he said. “It’s particularly driven by some of the key markets in California, like San Francisco and San Diego, as well as some other key cities in the region, like Seattle.
“Group business has been particularly strong in those destinations,” Church continued. “The technology and healthcare sectors dominate in those markets and those industries are performing well.”
Also, he said, “Denver has been strong through 2011 and into 2012; again, what I think we’re seeing there is that demand came back to peak levels last year, or very close to it, which has allowed hotels there to start pushing average daily rate. Portland, Ore., is on the same track as Denver, and Salt Lake City is yet another market that’s pulling in impressive demand," according to Church.
“The West is really outperforming other regions, like the South or the Northeast,” Church said.
But the country as a whole isn’t doing too badly, either. The nation’s hotels sold more than 1 billion room nights in 2011, surpassing the previous record set in 2007 by nearly 20 million room nights, according to the study.
The record demand levels were buoyed by record supply as the number of roomnights available in U.S. hotels during 2011 reached 1.76 billion—a 0.5% increase over the previous year.
The average hotel rate last year was $101.71, still below the pre-recession peak of $107.38 reached in 2008, according to the study.
But the revenue collected per available room jumped to $61 in 2011, up 8.2 percent compared with the previous year. It was the biggest increase since 2005.