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December 8, 2015

Hotel Group Bookings Set to Rise in Q4

hotelAhead of Q4 results being made available, the Cleveland Research Company revealed their own take on how the end of the year is expected to play out for hotels. The report showed that average daily rates are expected to be the strongest driver for revenue per available room in most regions, and hotels are expected to have a positive Q4 to follow up a strong Q3, especially in terms of group business.

In the third quarter, groups bookings continued to rise and are expected to reach their highest point in Q4 as a result of strong forward-booking trends and the industry's increased ability to drive rates. Another consequence of the industry's stronger rate foundation is CRC's tracking of RevPAR, which continued to rise in the single digits for the majority of hotel companies during Q3, all of which bodes for a strong Q4 and an even strong 2016.

Hyatt led the industry in room growth, up 7 percent to 8 percent, followed by Hilton and Marriott at 6 percent to 7 percent and Starwood Hotels & Resorts near 4 percent. 

As for Q4 expectations, CLC said that the year's twilight hours will most resemble Q2, benefitting from the push/pull effect of increased group and corporate travel during the end of the year thanks to the way holiday calendars were set up during August and September. 

For example, Hilton's group growth was up 4 percent in the third quarter but down down 6 percent in Q2 and 7 percent in Q1, though it is pacing up for Q4. The worst example was Starwood, which saw negative group business growth in Q3, down from 1.4 percent in Q2 and 6 percent in Q1, though it is also expected to rise in Q4. Hyatt saw the biggest hit, though, as it only saw group business rise 3 percent in Q3 from 10 percent in both the first and second quarter.

While group bookings will be stronger as the industry closes out the year, transient bookings are expected to remain mostly the same as Q3, disappointing those looking for an uptick in transient business for Q4.

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About the Author: Elliott Mest





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