U.S. lodging industry RevPar growth 24 percent since 2004

January 30, 2007 | Hospitality Industry

Smith Travel Research announced full year 2006 results for the U.S. lodging industry. Industry occupancy was 63.4 percent, up 0.5 percent versus 2005. Average room rate increased 7.0 percent to $97.31 and revenue per available room (RevPAR) gained 7.5 percent to $61.69.

Full year 2006 industry occupancy was 63.4 percent, up 0.5 percent versus 2005. Average room rate increased 7.0 percent to $97.31 and revenue per available room (RevPAR) - the combination of occupancy and average room rate and a key industry productivity measure - gained 7.5 percent to $61.69.

Industry room supply increased 0.6 percent in 2006 while demand (roomnights sold) gained 1.1 percent. Full year 2006 room revenue increased 8.1 percent to $100 billion.

In the fourth quarter of 2006, industry occupancy was 58.2 percent, a decrease of 1.3 percent versus fourth quarter 2005. Average room rate was $98.27 in the quarter, an increase of 7.4 percent and revenue per available room improved by 6 percent.

“The U.S. lodging industry turned in another strong performance in 2006”, said Mark Lomanno, President of Smith Travel Research. “Industry RevPar growth was somewhat lower than the all-time high of 2005. However, since 2004, RevPar has grown nearly 24 percent – the strongest 3-year growth since STR began tracking hotel performance in 1987. We expect another good year in 2007. Room supply growth will likely increase but should remain below the long-term trend. Based on current economic expectations, demand growth should continue, with stronger numbers more likely in the second half. We believe full year 2007 industry RevPar growth should be in the 5.5 – 6.0 percent range”.