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U.S. lodging industry reports 9% RevPAR increase

July 26, 2006 |

In the first half of 2006, U.S. lodging industry occupancy improved 2.1 percent to 63.5 percent versus same period prior year, according to Smith Travel Research. Average room rate was up 6.8 percent to $96.56 and REVPAR gained 9.0 percent to $61.30.

Industry occupancy reached 66.8 percent in the three months ending June 2006, up 1.2 percent versus second quarter 2005. Second quarter average room rate gained 7.0 percent to $97.02 and revenue per available room (REVPAR) - the combination of occupancy and average room rate and a key industry productivity measure - increased 8.3 percent to $64.79.

In the first half of 2006, industry occupancy improved 2.1 percent to 63.5 percent versus same period prior year. Average room rate was up 6.8 percent to $96.56 and REVPAR gained 9.0 percent to $61.30. First half industry room supply increased 0.4 percent while demand (room nights sold) grew 2.4 percent. Room revenue grew 9.4 percent in the first six months of 2006 to $49 billion.

In the month of June 2006, occupancy increased 1.0 percent to 70.8 percent while average room rate improved 7.5 percent to $97.22. June REVPAR gained 8.6 percent to $68.82.

“First half industry performance was strong, particularly considering prior year comps were tough”, said Mark Lomanno, President of Smith Travel Research. “Year-over-year comparisons will be even more difficult in the second half. Additionally, many forecasts call for slower economic growth for the balance of 2006. We anticipate continued RevPar growth in the second half but probably somewhat slower than the 9.0 percent increase we experienced in the first half”, Lomanno added.

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