Global Hotel Slump Persists; NYC Rates Drop 25%

Hotel performance results for April, released today by Smith Travel Research, illustrated the global nature of the economic downturn, with all four major regions—the Americas, Europe, Asia/Pacific and Middle East/Africa—showing double-digit percentage decreases in occupancy and revenue per available room and RevPAR in many markets plummeting by 30 percent or more.

Occupancy in the Americas dropped 11.3 percent year-over-year to 56.5 percent, while average daily rate was down 10 percent and RevPAR down 20.1 percent, according to the data. The United States took the hardest hit in terms of average daily rate, which dropped 9.4 percent to $98.37.

New York was one of only two key markets—the other being Manitoba/Saskatchewan, Canada—to see an occupancy decrease of less than 5 percent, but New York also saw one of the sharpest rate drops: down 25.5 percent to $203.58. Three other cities—Toronto, Montreal and Mexico City—also saw rates drop by more than 20 percent. Nassau, Bahamas, was the only major market in the Americas to report an increase in rates.

Several markets in the Americas saw RevPAR fall more than 35 percent: Santiago, Toronto, Mexico City and Buenos Aires. With April the month when swine flu first began to surface, Mexico City saw its RevPAR decrease by more than half.

In Europe, occupancy was down even more, by 13.8 percent to the level of 59.4 percent. Average daily rate in euros was down 14.7 percent, and RevPAR was down 26.5 percent.

Düsseldorf, Germany, saw huge drops across all metrics. Occupancy was down by 31.8 percent, rates down 46.5 percent and RevPAR down 63.5 percent. Besides Düsseldorf, six cities saw RevPAR drop more than 40 percent: Geneva, which also saw the largest drop in occupancy for the region; Moscow, where rates decreased by 38 percent; Frankfurt, Germany; Oslo, Norway; Gothenburg, Sweden; and Stockholm, Sweden.

A few European markets bucked the trends. Edinburgh, Scotland, had a 7.3 percent increase in occupancy. Salzburg, Austria, was the only market in Europe to see an increase in RevPAR, and the city also saw rates increase by almost 30 percent.

In the Asia/Pacific region, occupancy was down by 14.3 percent to 59.2 percent, average daily rate was down 20.1 percent and RevPAR down 31.5 percent.

RevPAR dropped by about 50 percent in several Asian markets: New Delhi, Mumbai, Beijing and Bangkok, where occupancy also dropped by 33.6 percent to 44.3 percent. Rates in New Delhi, Mumbai, Beijing and Sydney all were down more than 30 percent.

"The Asia/Pacific region has come into a similar cyclical movement as Europe and North America, but there are a few highlights still," STR Global managing director James Chappell said in a statement. "Bali, Indonesia, increased 21.5 percent in RevPAR and Seoul, South Korea, reported a 16.3 percent increase in the measure."

Even the Middle East/Africa region, which had been performing comparatively stronger in the downturn, had decreases across all three metrics in April. Occupancy was down 13 percent to 66.8 percent, rates were down 1.3 percent and RevPAR was down 14.1 percent.

"It is getting harder to find a positive angle in the Middle East/Africa performance data," according to Chappell. "The region, which had been insulated somewhat from the effects of the global economic recession in the past, now seems just as susceptible as are the other three global regions."

Occupancy drops were the highest, more than 20 percent, in Johannesburg, South Africa; Riyadh, Saudi Arabia; and Muscat, Oman. Istanbul, Turkey had the biggest decrease in rates, down 26.7 percent, and RevPAR, down 32.2 percent.

Beirut, Lebanon, was the standout city, with occupancy up 84.5 percent, rates up 36.9 percent and RevPAR up 152.5 percent. Three other cities also saw rates increase by double-digit percentages: Jeddah, Saudi Arabia; Amman, Jordan; and Muscat.