What's in Store for the Hotel Market in 2017?
While the hotel market continues to be somewhat bullish, signs are afoot that things are finally going to be slowing as we progress through the year. Not a big change, just a gradual slowing. Considering the industry has been enjoying the highest occupancies ever, at least in the 30 years it’s been measured, this news isn’t entirely surprising.
I recently had the opportunity to sit in on a presentation by Jan Frietag, Senior VP of Smith Travel Research (STR) during the Two Roads Hospitality Group Meetings Advisory Council. Jan is a bright guy and always entertaining, which isn’t necessarily easy to do when presenting a lot of facts and figures. However, if you are in the business of selling or booking hotel rooms and space, these trends are important to note.
In a nutshell, room demand is slightly outpacing growth, however STR is predicting that occupancy will eventually flatten and decrease slightly. They don’t see AirBnB as having a major impact at all in this decrease; rather, they see it as simply expanding capacity, particularly in cities with extremely high demand such as San Francisco and New York. AirBnB currently doesn’t share all statistics, but we do know their occupancy has never been higher than 50% and half of their stays are over seven nights, which is vastly different from a typical hotel stay (either group or transient).
STR predicts that consolidation in the hotel industry will continue, yet it still remains to be seen what the eventual results of these mergers will mean to the consumer.
You can find a complete recap and analysis of STR's research here, and we recommend booking early whenever possible, at least for the foreseeable future!