Thanks to U.S. demand, hotels see worldwide RevPAR growth


Global hoteliers' fourth-quarter 2012 financial results reflected a steady rise in U.S. demand, offsetting revenue lags in regions such as Europe, and revenue increases working their way down from the luxury sector to midscale properties.

Marriott International, Starwood Hotels & Resorts, InterContinental Hotels Group (IHG), Hyatt Hotels, Wyndham Worldwide and Choice Hotels International all reported growth in revenue per available room (RevPAR) that was consistent across their full-service, select-service, midscale and budget brands.

Marriott, the largest publicly traded U.S. hotelier by sales, last week said its North American RevPAR rose 5.9%, primarily on room-rate increases. RevPAR at select-service brands like Courtyard by Marriott and Residence Inn rose 6%, while RevPAR at North American full-service hotels like its flagship and Ritz-Carlton brands was up 5.7%.

Marriott's increased U.S. revenue offset the effects of more tepid demand in Europe and the Asia-Pacific region. Global RevPAR increased 5.2%, excluding currency effects. Marriott's net income was $181 million, which was 28% more than year-earlier numbers and 14% more than Q4 2011 profit, excluding the vacation rentals division that it spun off in late 2011.

"Business is very strong," Marriott CEO Arne Sorenson said on a Feb. 20 conference call with analysts. "But we can't ignore the risk of government spending cuts to the economy, generally, and to the travel industry, specifically."

U.K.-based IHG, the world's largest hotelier by room count, also reported fourth-quarter results last week, saying that RevPAR in its Americas region had advanced 5.7% from a year earlier. At its flagship luxury-branded hotels in the U.S., RevPAR jumped 9.4% and rose more than 6% at Holiday Inn and Holiday Inn Express midscale hotels.

Starwood's North American RevPAR rose 5.2%, more than offsetting the effects of a 2.4% decline in Europe and the little-changed RevPAR at its Africa and Middle East properties.

Among Starwood's brands, Four Points by Sheraton saw a 5.9% increase in RevPAR, while W Hotels was up 4.2%. Sheraton and Westin's RevPAR each increased almost 4%. Starwood's net income fell 15% from a year earlier, to $142 million, as the company took a $113 million loss on early debt extinguishment.

Both Hyatt's and Choice Hotels' systemwide RevPAR advanced 4.2%. Hyatt's increases came primarily from more demand for rooms at its select-service brands, such as Hyatt Place and Hyatt House. Choice Hotels' RevPAR was pulled up by its Comfort Suites and Sleep Inn midscale franchises.

Hyatt's net income dropped 69% from a year earlier, to $15 million, primarily on one-time charges. Choice Hotels' net income fell less than 1%, to $24.5 million, as interest expenses rose on money borrowed to pay a $600 million dividend last August.

Finally, Wyndham's fourth-quarter RevPAR rose 3.9% from a year earlier. While demand for its upscale flagship brand was little changed, Ramada's RevPAR was up 4.5%, and Howard Johnson and Travelodge RevPAR advanced 6% and 5%, respectively. Wyndham's net income jumped 45% from a year earlier, to $81 million, while profit at its lodging division jumped 51%, to $62 million.

"There are probably business travelers who still don't have the full go-ahead to stay in the upper-upscale hotels," said STR Senior Vice President Jan Freitag. But he added that frugality is driving demand to the midscale sector. "And the leisure traveler is back."


From Our Partners

From Our Partners

What's New 2022
What’s New 2022
Register Now
World of Luxury 12.06.21 Horizontal
World of Luxury
Read More
2021 Virgin Webinar
Sea blue. Save green.
Watch Now

JDS Travel News JDS Viewpoints JDS Africa/MI