Hendersonville, TN -- The country's hoteliers enjoyed strong performance last year, with average hotel room rates increasing seven percent over 2005, to $97.31, Smith Travel Research reported today.
Revenue per available room, or RevPAR, a key measure of hotel productivity, increased 7.5 percent over 2005, to $61.69, according to Smith Travel, which released its full-year report for the U.S. lodging industry. Room revenue last year totaled $100 billion, a more than eight-percent increase over 2005.
"The U.S. lodging industry turned in another strong performance in 2006," said Smith Travel president Mark Lomanno. "Industry RevPar growth was somewhat lower than the all-time high of 2005. However, since 2004, RevPar has grown nearly 24 percent -- the strongest three-year growth since STR began tracking hotel performance, in 1987."
Occupancy for the year was 63.4 percent, up just half a percent over the previous year. Demand grew 1.1 percent last year while room supply increased just over half a percent.
Results for the fourth quarter of 2006 indicate a slowdown in the industry's growth. Room rate increases were on a par with full-year rate rises, but occupancy decreased 1.3 percent versus fourth-quarter 2005. RevPAR increased six percent in the fourth quarter over the same period last year, below the 7.5-percent increase in RevPAR for the full year.
While Lomanno predicted another good year for the lodging industry in 2007, he expected slower growth in RevPAR for the second consecutive year, an increase of 5.5 to 6 percent.
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