5 Things to Know: 25 October 2010

Asia/Pacific

Hotels in the Asia/Pacific region experienced increases in all three key performance metrics for September 2010 when reported in United States dollars. In year-over-year measurements, the region’s occupancy rose 7.4% to 66.9%, average daily rate increased 11% to US$135.54, and revenue per available room jumped 19.2% to US$90.71.

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

Americas

The Americas region recorded positive results in the three key performance metrics when reported in U.S. dollars for September 2010. The region’s occupancy rose 6.6% to 60.1%, ADR went up 2.3% to US$101.07, and RevPAR increased 9.1% to US$60.78.

• Read “STR Global: Americas Sept. 2010 results.”

Europe

The European hotel industry posted positive results in year-over-year metrics when reported in U.S. dollars, euros and British pounds for September 2010.

“September saw the highest monthly occupancy and average room rate so far for this year,” said Elizabeth Randall, managing director at STR Global. “With 74.8% occupancy and €106.68 (US$149.19) ADR, Europe also achieved its highest RevPAR of €79.78 (US$111.57). One has to go back to September 2008 to get a similar RevPAR (€82.86) (US$115.89). As the continued RevPAR recovery gains strength, the outlook looks brighter for the European markets despite the continued risks to the wider economies and the hotel markets.” 

• Read “STR Global: Europe Sept. 2010 results.”

Middle East/Africa

The Middle East/Africa region reported increases in all three key performance measurements for September 2010 when reported in U.S. dollars. The region’s occupancy ended the month with a 5.6% increase to 58.2%, ADR rose 8.2% to US$147.39, and RevPAR went up 14.2% to US$85.80.

• Read “STR Global: MEA results for Sept. 2010.”

Loan defaults for this year already are at US$21.66 billion and have surpassed 2009 levels (US$17.75 billion) by loan balance. The number of loan defaults through the third quarter (1,452) is almost equal to 2009 figures (1,464).

Cumulative default rates rose 286 basis points for hotel loans. One of the largest three defaults in the third quarter was the Innkeepers Portfolio (US$825 million hotel; 2007 vintage).

The industry’s occupancy was up 6.7% to 63.9%, ADR rose 1.6% to US$99.07, and RevPAR increased 8.4% to US$63.34.

• Read “STR reports third-quarter 2010 results.”

I’ve taken the position that while one-off hotel owners will not be affected by a single transaction, a sale of this nature would be good for the hotel industry at large.

• Read “Blog: Why the Hilton debt deal matters.”

Columnist Joel Ross, however, says that this is an isolated deal with big players. Hotel owners would do well to consider other options for a refi bailout.

• Read “Hilton debt deal means nothing for individual hotels.”

For two authors with different perspectives on the matter, it will be interesting to see who is successful in predicting the future. When and if the purchase happens, that is.

RevPAR growth in the Americas region accelerated through the third quarter to 6.7%, driven by occupancy growth of 3.8 percentage points and rate growth of 0.8% as business travelers continued to return in greater numbers. Rate growth improved through the quarter.
 
Holiday Inn and Holiday Inn Express RevPAR growth accelerated during the third quarter, driven by relaunched hotels, which are strongly outperforming those hotels that have not completed the relaunch. Third quarter RevPAR growth at hotels that completed the relaunch grew by 7.9% at Holiday Inn and 6.8% at Holiday Inn Express. In the U.S., these hotels sit at a 36% and 20% RevPAR premium to their respective industry segments. 

• Read “IHG announces Q3 Americas RevPAR growth.”

Compiled by Stacey Higgins.