News | 5 Things to Know: 23 June 2010

STR Global released global monthly performance metrics for May by region. All regions saw increases in key measurements, although Europe performance changed based on currency.

Middle East/Africa
The Middle East/Africa region reported favourable results in the three key measurements for May 2010 when reported in U.S. dollars, according to data compiled by STR Global.

The region’s occupancy ended the month virtually flat with a 0.8-percent increase to 62.2 percent, average daily rate increased 1.3 percent to US$144.35, and revenue per available room grew 2.1 percent to US$89.

• Read “STR Global: Middle East/Africa results for May 2010.”

Europe
The European hotel industry posted mixed results in year-over-year metrics when reported in U.S. dollars, euro and British pounds for May 2010, according to data compiled by STR Global.com.

Birmingham, England, experienced the largest increases in all three key performance metrics. The market’s occupancy rose 19.0 percent to 71.9 percent, ADR was up 38.6 percent to EUR91.47, and RevPAR jumped 65.0 percent to EUR65.80.

• Read “STR Global: Europe performance May 2010.”

Asia/Pacific
Hotels in the Asia/Pacific region experienced increases in all three key performance metrics for May 2010 when reported in U.S. dollars, according to data compiled by STR Global.
In year-over-year measurements, the Asia/Pacific region’s occupancy rose 15.3 percent to 63.1 percent, average daily rate increased 8.6 percent to US$125.52, and revenue per available room jumped 25.2 percent to US$79.24.

• Read “STR Global: Asia/Pacific results for May 2010.”

Americas

The Americas region recorded positive results in the three key performance metrics when reported in U.S. dollars for May 2010, according to data compiled by STR and STR Global.

In May 2010, the region’s occupancy rose 7.5 percent to 59.1 percent, average daily rate ended the month virtually flat with a 0.2-percent decrease to US$99.10, and revenue per available room increased 7.8 percent to US$58.54.

• Read “STR Global: Americas results for May 2010.”

Forward-looking data from Pegasus Solutions shows a more than 30-percent increase in Global Distribution System revenue for hotels year-on-year through the end of September. The positive data, as reported in the May issue of The Pegasus View, indicates double-digit growth in hotel booking volumes for both corporate and leisure travel.

The May report also shows a 39.6 percent increase in net revenue on a date-of-booking basis for the GDS channel, according to Mike Kistner, CEO of Pegasus Solutions.

U.S. lodging industry capital expenditures are forecast to decrease in 2010, following a decrease in 2009 for the first year since 2003, following years of increasing and record CapEx spending, according to Bjorn Hanson, divisional dean and clinical professor at New York University, in a Trend Analysis Report.

The forecast for the coming year is for capital expenditures of approximately US$3.0 billion, which represents a decrease of 9.9 percent from 2009 levels, following a decrease of 40 percent in 2009. An estimated US$5.5 billion—a record amount—was invested in capital improvements for existing U.S. hotels in 2008.

Below is Hanson’s summary of estimated U.S. lodging industry capital expenditures in recent years:
Year Amount (in billions)
2005 $4.8
2006 5.0
2007 5.3
2008 5.5
2009 3.3
2010 3.0 (forecast)

• Read "NYU study: CapEx expected to decrease again in 2010."

After three straight months of improving conditions, the Architecture Billings Index fell nearly three points. As a leading economic indicator of construction activity in the United States, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending.

The American Institute of Architects reported the May ABI rating was 45.8, down substantially from a reading of 48.4 the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings), and comes on the heels of the highest score since January 2008 when revenue at architecture firms headed into recession. The new projects inquiry index was 55.5.

Sales of previously owned homes in the U.S. slipped 2.2 percent in May from a month earlier, according to The Wall Street Journal. (Subscription required)

The decline followed two consecutive months of increases. Although the tax credit ended 30 April for contract signings on homes, buyers have until 30 June to close. Existing-home sales data are based on closings.
The median price for an existing home was US$179,600 in May, up 2.7 percent from a year earlier.

Compiled by Stacey Higgins.