Hotel occupancy continues to reach new heights but rate not keeping pace | Hotel Management

The U.S. hotel industry’s ongoing run of monthly RevPAR increases and its recent record occupancy levels are obscuring a more unsettling trend, one that many hotel groups will be unable to overcome quickly when the hot streak ends and a downturn finally comes to lodging.

Robust occupancy, especially in the major destination markets, does not fit with the slowdown in RevPAR growth and anemic ADR growth in the industry. Something is going wrong with hotels’ pricing power, and hospitality companies are blaming several things, from increasing supply outpacing demand, to difficulties with online travel agencies and the effects of Airbnb.

Those are all legitimate challenges, but there’s a larger issue at play. Hoteliers should be looking inward to solve their problems. There is no excuse not to be yielding rates more aggressively with occupancy continuing to climb beyond already record levels.

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Hotel occupancy continues to reach new heights but rate not keeping pace | Hotel Management.