Group Business Remains Strong Amid Weakening Hotel Market

Like flowers, the hotel business typically blooms in spring. This year, however, the industry is facing a disappointing season, according to hotel consultancy TravelClick, which today published its March 2017 North American Hospitality Review (NAHR).

According to TravelClick's data, average daily rates (ADR) continue to grow -- they increased 2 percent overall in March -- but committed occupancy is down, falling 1. 6 percent this month and 1.2 percent during the first quarter overall.

"The advance booking pace for March is disappointing, especially considering the annual spring reservation bounce that usually occurs during this time of year," said TravelClick Senior Industry Analyst John Hach.

The second quarter is expected to mirror the first quarter, according to TravelClick, which forecasts a 2.8 percent increase in ADR but a 0.6 percent decline in committed occupancy.

"As the reservation pace in the second quarter of 2017 doesn't show much improvement, it's becoming abundantly clear that hoteliers must take proactive steps to capture the advance reservation demand that's coming into their markets as soon as possible," Hach continued. "While ADR continues to trend higher, hoteliers now have a much greater need to differentiate the guest experience above and beyond their local competition."  
One bright spot in TravelClick's report is group travel, which for now remains an exception to the rule. Group ADR and committed occupancy are both up, according to the company, which said the former rose 3.5 percent in March and the latter 1.5 percent.

Still, even the group market is tenuous, according to Hach. "Even though group travel is holding strong in the first quarter, group, leisure, and business travel continue to decline across many major markets," he said.

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