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Rising Interest in Group Hotel Bookings

January 18, 2013 9:42 PM | Anonymous

Article by: Claudette Covey, TravelPulse

After a dip in demand over the past couple of months, group occupancy is once again beginning to increase, according to data from the December 2012 TravelClickNorth American Hospitality Review (NAHR). When looking at the fourth quarter of 2012 through the third quarter of 2013, group demand has bounced back from being flat (down 0.1 percent) last month to being up 2.2 percent, year over year.

“Based on TravelClick data, it appears that decline in group was temporary,” said Tim Hart, executive vice president, enterprise research and development, TravelClick. “However, we expect that some hoteliers may be incentivizing group bookings by keeping average daily rate (ADR) relatively flat. As we head into the New Year, there are opportunities for hoteliers to increase both ADR and occupancy in this critical segment.”

Committed occupancy across all segments, for December 2012 through November 2013, is up 3.9 percent compared to a year ago. ADR is up 4.6 percent, compared to the same time period last year. Revenue per available room (RevPAR) is up 12.8 percent.

The transient segment, individual business and leisure travelers, is still the driving force behind the rise in occupancy and ADR, despite the improvement of the group segment. Committed occupancy for this segment is up 8.9 percent and ADR is up 5.5 percent. When broken down further, committed occupancy for leisure travel is up 8.9 percent and business travel is up 9.4 percent, respectively. As for ADR, business and leisure are up 6.7 and 4.8 percent, respectively.

For the fourth quarter of 2012, committed occupancy is up 3.7 percent and ADR is up 3.3 percent. For December specifically, all segments showed improvement compared to their performance in October and November. Committed occupancy was strong across all segments, up 8.1 percent from last year. ADR was up 4 percent, compared to the same time period last year and RevPar is up a significant 12.1 percent.

While group led in committed occupancy in December, with an increase of 9.9 percent to transient’s 7.4 percent, ADR increase was driven by the transient segment, which is up 4.2 percent to group’s 3.5 percent.

Committed occupancy across all segments is up 4.3 percent in the first quarter of 2013, which is driven by increases in demand in January and February. Primarily, transient bookings for the first quarter are up significantly, by 15.4 percent, over the same time last year. Overall, ADR for the first quarter is up 5.7 percent over the same time last year. The increase is driven by transient, which is up 8 percent. Group is up 1.4 percent year-over-year, which is a positive sign given the fact that while overall ADR was up in October and November, the group segment saw declines.

The December NAHR looks at group sales commitments and individual reservations in the 25 major North American markets for hotel stays that are booked by Dec. 2, 2012, for the period of December 2012 to 2013.

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