Market Report U.S.

US Hotels Showing Strong Profitability Growth

April Profits per Room Rise 11.3% for US Hoteliers

e-forecasting.com Hotel room rates in the top-25 most popular U.S. destinations are averaging $221.38 this April, up from $202.4 in March, according to trivago hotel price indices¹ (tHPI) released today. The U.S. online average daily rate (oADR), the industry’s best analytic for competitive pricing, currently ranges among the top-25 destinations from a high of $377 to a low of $139 this April. Based on industry surveys, e−forecasting.com estimates that in 2014 about one-half of US hotel sales are made online via brand websites and travel agent merchant websites, compared with only one-fourth seven years ago.

Table - U.S. Hotel Business Analytics March February 2015

On year-over-year basis, the U.S. average online ADR is up (+12.9%) in April from a year ago, better than the previous month's reading of (+7.1%). This April, trivago online room rates in New York are gaining (+4.1%) from last year to $377 a night, making the city the most expensive destination among the top-25 U.S. hotel markets.  Boston takes the second place in April with an online room rate of $367, after a drop of (−0.5%) from a year ago. In Washington D.C., the online room rate in April is growing (+20.3%) from last year to $361 a night, ranking the city in the third place of the most expensive destinations in the United States.

Graph - Top 25 Most Popular U.S. DestinationsAt the bottom of the list, the three least expensive, or most affordable, cities to visit this April is Las Vegas recording a trivago online ADR of $157 a night with a (+19.8%) change from a year ago; San Antonio posts an online ADR of $143 with a (+15.3%) change from last year; and lastly, Salt Lake City marks an online ADR of $139 with a nil change from a year ago. With a median online ADR of $186 amongst the top-25 most popular U.S. destinations, San Diego is the country's average affordable city to visit this April.

Moving from data to hotel-biz-analytics®, e−forecasting.com's Smoothed Seasonally Adjusted (SSA)² U.S. average online room rate has hit $197.35 in April.  On a month-over-month basis - the hoteliers' analytic for tracking changes of what's now vs. what's happened in comparison to twelve months ago - SSA online ADR this April is up (+0.4%) from the previous month, which is the same percent change as in the previous month. Looking at the top-25 hotel destinations, the month-to-month percent change in April ranges from a high of (+2.6%) in Phoenix to a low of (−0.6%) in San Jose. Amongst the top-25 destinations, the SSA online monthly room rate is growing in 18 cities; and is falling or staying flat in 7 cities.

"The latest US Monthly Hotel Forecast predicts the US occupancy to average 63.1% in 2016 a decline of  1.6 percent points from 2015," said Maria Sogard, CEO of e­forecasting.com. For a complimentary copy of the full US Monthly Hotel Forecast with two-year predictions of occupancy, ADR, RevPAR, online ADR, costs per room, profitability and predictive analytics for investing in hotel properties, email us at info@e-forecasting.com with subject: USHOTfcast.

Looking at profitability, hoteliers' ultimate gauge for decision-making, profits per room are up (+11.3%) on a year-over-year basis in April, since U.S. trivago's average online room rate has gained (+12.9%) while e−forecasting.com national unit (per room) cost index is up (+1.4%). For U.S. hoteliers, year-over-year profit margins posted a reading of (+5.8%) in the previous month (March), compared to a mark of (+2.9%) a year ago (April 2014). Using trivago's online hotel room rates for the top-25 U.S. destinations and e−forecasting.com's city-centric hotel unit (room) cost indices, year-over-year percent change in profits per room currently range from a high of (+29.9%) in Indianapolis to a low of (−4.6%) in Philadelphia in April. Amongst the top-25 destinations, profits per room are up in 23 cities; they are down or are flat in two cities.

On tracking monthly the risk for business losses in providing services per room, the probability for U.S. hoteliers being in a negative profits (losses) phase of the industry's business cycle hit 15% in April, which is lower than March's reading of 19%. In the top-25 hotel destinations, the risk for hoteliers being in a period of losses per room in April ranging from a high of 93% in Philadelphia to a low of 1% in San Jose. The probability of losses per room is above 50% in 4 cities; it is 50 or below in 21 cities.

Graph - Profits Per Room in Six U.S. Destinations

About e-forecasting.com                                                                                                        

Founded in Durham, NH in 1994, e-forecasting.com is a predictive intelligence consulting firm offering to clients customized solutions for what’s next. For over 15 years, its hotel insights division has focused on hotel predictive analytics and forecasting products for the top destinations around the world to enhance its clients competitive advantage and improve their bottom line.

About trivago                                                                                                                                  

Founded in Düsseldorf in 2005 with operations in 39 countries, trivago is the world’s largest online hotel search site, comparing room rates from over 700,000 hotels on over 200 booking sites worldwide.  Each month, more than 45 million visitors use trivago’s unique online technology, which compares 5 billion hotel deals a day - more than a trillion a year - and saves them an average of 35% per booking.  Visit online http://www.trivago.com.



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