Hotel Distribution Cost: The only cost driver that can save your property’s bottom line in 2017
Oct 18, 2016
At the recent Lodging Conference in Phoenix, AZ both STR and CBRE projected a rather bleak picture of where the industry is heading in 2017: supply outpacing demand, Airbnb “stealing” demand share from hotels, occupancy rates flattening and even declining (STR.)
STR’s 2017 projections for the United States expect occupancy to decrease by -0.3%, while ADR increases by 2.8% and RevPAR by 2.8% respectively. Interestingly, the average supply and demand will level off at 1.6%, with some markets experiencing significant increases in supply: New York +14%, Denver +10%, Seattle +8%, Houston and Dallas +7%, Miami +6%, etc.
In short, 24 out of 26 major markets will experience higher supply vs demand growth, which inevitably will lead to occupancy declines due to over-supply and the negative impact of Airbnb.
What can hoteliers do to improve the bottom line?
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