If you love a hotel bargain, this ought to make your day. The average daily room rate dropped 5.2 percent in January, to about $100, according to the latest numbers from Smith Travel Research. Can you say “fire sale”?
Mark Lomanno, STR’s president, summed up the bleak picture for hotels:
The U.S. lodging industry results in January continued to reflect the deteriorating economic conditions throughout the country. In addition, the recent trend of accelerating declines in performance seen in the Top 25 U.S. markets highlights the difficulty hotels face when declines in both business and leisure travel occur in tandem.
But let’s look at the actual picture. It’s not pretty.
Among the highlights:
• Tampa-St.Petersburg, Florida, reported an increase in average daily room rate, up 9.5 percent to $126. Thanks, Superbowl!
• Largest occupancy declines: Detroit, Michigan (-18.9 percent to 40.6 percent), Seattle, Washington (-17.9 percent to 45.7 percent), and Atlanta, Georgia (-16.8 percent to 48.4 percent).
• Largest average daily room rate declines: New York, New York (-13.1 percent to $199), Phoenix, Arizona (-12.3 percent to $133), and Detroit (-11.9 percent to $87.22).
• The biggest losers? Luxury hotels. As a group, they reported the largest decreases in performance measurements. The segment posted decreases of 17.1 percent in occupancy to 52.7 percent, and a 7.6 percent decline in average room rate.
Let’s put that into perspective.
In January, the average hotel charged about $100 a night but was less than half-full. What happened to the other 55 percent of the rooms? As my colleague Charlie Leocha points out today, a lot of them went to sites like Priceline.
To paraphrase the Negotiator: “Imagine. The. Deals.”