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Distribution Channel Analysis
- Profitability and what the industry
can expect in the near term in the
distribution landscape.
- Hotel Business
Environment
- Profitability and what the industry can expect
in the near term in the distribution landscape.
- Hotel Industry Size and
Structure.
- This section will review five widely studied
performance metrics. They are room supply,
room demand, occupancy, ADR, and Revpar.
- This section will review five widely studied
performance metrics. They are room supply,
room demand, occupancy, ADR, and Revpar.
- Supply
- U.S. lodging industry currently has just over
52,000 properties with 20 or more rooms in which
there are almost 4.9 million hotel rooms. The 20
years the room supply in the United States has
grown to the current level from 3.3 million rooms
in 1990, an increase of almost 50% and a
compound annual growth rate of 1.9%.
- U.S. lodging industry currently has just over
52,000 properties with 20 or more rooms in which
there are almost 4.9 million hotel rooms. The 20
years the room supply in the United States has
grown to the current level from 3.3 million rooms
in 1990, an increase of almost 50% and a
compound annual growth rate of 1.9%.
- Hotel Industry Size and
Structure.
- Profitability and what the industry can expect
in the near term in the distribution landscape.
- Demand
- Turning to room demand, an examination of
Exhibit 4 reveals strong and steady room night
demand over the past 20 years, growing from an
average number of rooms sold per day of 2.1
million to almost 2.8 million today.
- Turning to room demand, an examination of
Exhibit 4 reveals strong and steady room night
demand over the past 20 years, growing from an
average number of rooms sold per day of 2.1
million to almost 2.8 million today.
- Occupancy
- Over the past 20 years, U.S. hotel industry
occupancy has fluctuated as the combination of
supply additions and the economic influences on
demand took their turns being the major driver of
this key measure
- Over the past 20 years, U.S. hotel industry
occupancy has fluctuated as the combination of
supply additions and the economic influences on
demand took their turns being the major driver of
this key measure
- Average Daily Room Rate
- U.S. lodging industry to have truly outstanding performance,
increased revenue and profitability need to come from a
combination of having more guests in their rooms coupled with
increasing room rates
- U.S. lodging industry to have truly outstanding performance,
increased revenue and profitability need to come from a
combination of having more guests in their rooms coupled with
increasing room rates
- RevPar
- RevPar combines the effects of both occupancy and
room-rate performance, its level and movement over
time is often used to gauge the general health of both the
industry and individual hotels.
- RevPar combines the effects of both occupancy and
room-rate performance, its level and movement over
time is often used to gauge the general health of both the
industry and individual hotels.
- Price Elasticity of Demand
- Refers to the percentage change in
demand generated by a percentage
change in price.
- Refers to the percentage change in
demand generated by a percentage
change in price.
- Merchant – hotel receives net rate after intermediary
get compensated based on negotiated percentage with
the hotel.
- Retail – intermediary is compensated on a
commission basis based on a pre-negotiated
percentage. The commission is paid by the
hotels after the total room rate is sent to the
property
- Opaque – bidding method, brand not disclosed to
consumer until after sale, hotel gets
pre-negotiated rate with vendor. Vendor keeps
difference between what the guest pays and the
pre-negotiated room rate. Typically, the
percentage of the room rate keep by the vendor
is in the range of 35% to 50%.
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