Average Daily Room Rate Comparison Across 44 Hotel Brands

Tables in this article show the year over year changes in average room rates and occupancy for the various brands in five major hotel chains including Choice Hotels International, InterContinental Hotels Group, Marriott Hotels, Starwood Hotels, and Wyndham Hotels Group. These five chains represent over 40 hotel brands in the USA and around the world. I was unable to locate comparable data on the web for Hilton Hotels or Hyatt Hotels.

Financial reports data from the first quarter of 2009 was used to show the average daily room rate changes and occupancy declines from 2008 to 2009. In the next couple of weeks the financial reports for April through June will be released by the major hotel corporations. Expect the data to show even more dramatic declines in rates and occupancy. After all, this recession is a whopper.

A discussion on FlyerTalk got me thinking about what the impact of the global recession across hotel market segments and different hotel chains. And are we truly travelers in a time of global recession for the hotel industry?

Smith Travel Research is the kind of company that has hotel rate and occupancy data compiled for a numbers geek like me. I like to periodically check their reports. Unfortunately, I did not see as many reports available online for free viewing as I remember finding last year. They are in the business of making money after all.

I am in the business of making money too when I can, but here is my preliminary research for a free layman’s guide to hotel pricing and the impact of the global recession on travel.

In the next couple of weeks the major hotel chains will release 2009 Second Quarter financial data. The great thing about quarterly financial reports is public access to the hotel chain’s statistics for number of hotels, average room rates, and average occupancy.

I have never worked in the field of hospitality and certainly never been in management so I have limited interest in hotel chains’ financial data. My interest is hotel properties, room rates, and occupancy rates that has direct relevance to the frequent guest.

And now for the numbers:

Starwood Hotels Brands

Market Segment

Number Hotels

U.S. Average Daily Rate

(12 month rate change)

March 2009

US Average Occupancy March 2009

Average Daily Rate

International

Hotels

March 2009

Occupancy Rate International Hotels

March 2009

Luxury Collection

Upper upscale to luxury

$342.04

Starwood data is combined with St. Regis brand

(-12.1%)

57.7%

(-11.8)

$261.30

Starwood data is combined with St. Regis

(-26.5%)

48.4%

(-10.9)

St. Regis

Luxury

See above

W Hotels

Upper upscale to luxury

$226.03

(-19.5%)

57.4%

(-14.9)

$384.63

(-18.0%)

54.2%

(-1.1)

Le Meridien

Upper upscale to luxury 107

$208.87

(-25.7%)

61.8%

(-5.1%)

$182.37

(-17.9%)

59.6%

(-8.4)

Westin Hotels

Upper upscale

162

$175.77

(-11.2%)

59.8%

(-6.9)

$175.10

(-17.4%)

58.3%

(-5.4)

Sheraton Hotels

Upscale

405

$143.34

(-11.3%)

56.3%

(-7.9)

$158.26

(- 9.9%)

56.2%

(-7.0)

Aloft

upscale

$148.62

(-6.0%)

No data

Four Points

Midscale

135

$97.27

(-11.8%)

56.9%

(-5.9)

$115.69

(-16.5%)

60.4%

(-3.9)

Element

Extended stay

No data

W Hotels are suffering big time in the USA which may account for why W San Diego and W Scottsdale are in financial trouble.

Luxury Collection/St. Regis average daily rate calculation:

2008 Average Daily Rate = $370.04

2009 Average Daily Rate = $296.56

The rate change is calculated by the equation ($370.04 – $296.56) / $370.04 = .199

The average daily rate dropped 19.9% year over year from the average room rate in Q12008 to Q1 2009.

Luxury Collection/St. Regis Occupancy Rates seem skewed to me because the decline in hotel occupancy is shown based on total rooms and not as a percentage decline in occupancy from the previous year.

For example: Luxury Collection/St. Regis Occupancy Rate numbers for International Hotels

2008 Average Occupancy Rate = 59.3%

2009 Average Occupancy rate = 48.4%

Starwood hotels reports this as a -10.9 variance. But the occupancy decrease is not actually 10.9% from 2008 to 2009.

My elementary math logic calculates this year-over-year occupancy drop as a higher percentage decline in that (59.3 – 48.4) / 59.3 = 18.4% fewer hotel guest rooms occupied in 2009 than 2008.

Regardless of how the calculation is done, the numbers all look pretty bad to me with regard to falling hotel occupancy from the first quarter 2008 to first quarter 2009.

Take the Travelodge brand and there are even strong signs of a dramatic decline in hotel room occupancy in the economy segment of hotels.

2008 Average Occupancy Rate = 45.2%

2009 Average Occupancy rate = 39.6%

Following Starwood Hotels method this is a -5.6 decline in 2009 from 2008.

Calculate this as a percentage decrease in occupied rooms from March 2008 to March 2009 and the rate decline is much more dramatic:

(45.2-39.6) / 45.2 = 12.4% occupancy decline in occupied rooms from 2008 to 2009 at Travelodge Hotels around the country. This occupancy decline is in the face of a 16% decline in average room rates.

Wyndham Hotels Group

Wyndham Hotel Group brands –Market Segment- Number Hotels

(March 2009)

U.S. Average Daily Rate and 12 month ADR rate change

(March 2009)

March 2008 Average Daily Rate

Average Occupancy rate for Q1 2009

Average Occupancy rate for

Q1 2008

Wyndham Hotels and Resorts

Upscale

82 Hotels

$124.60

(+6.9%)

$116.61

51.6%

(-9.2)

61.8%

Hawthorn Suites

Extended Stay

90 Hotels

$89.93

No data (brand acquired from Hyatt in 2008)

50.6%

No data (brand acquired from Hyatt in 2008)

Wingate Inn

Midscale

166 Hotels

$85.17

(-7.3%)

$91.84

50.7%

(-7.4)

58.1%

Ramada

Midscale

885 Hotels

$74.44

(-6.6%)

$79.69

44.0%

(-6.1)

50.1%

Days Inn

Economy

1,851 hotels

$59.30

(-4.3%)

$61.99

41.4%

(-4.5)

45.9%

Super 8

Economy

2,105 Hotels

$54.67

(-3.7%)

$56.78

43.6%

(-4.9)

48.5%

Baymont Inn

Midscale

225 Hotels

$61.63

(-6.1%)

$65.66

43.8%

(-2.2)

46.0%

Howard Johnson

Midscale

475 Hotels

$60.02

(-4.9%)

$63.11

39.9%

(-3.9)

43.8%

Travelodge

Economy

471 Hotels

$57.07

(-15.7%)

$67.68

39.6%

(-5.6)

45.2%

Microtel Inn

Economy

313 Hotels

$55.96

No data

45.5%

No data

Knights Inn

Economy

309 Hotels

$41.08

(+0.5%)

$40.88

36.1%

(-1.8)

37.9%

Wyndham Hotels Group 2009 Q1 Financial Report

Small changes in average daily rate of $3 to $5 per night equate to a 5% to 8% rate drop for these economy and midscale chains in Wyndham Hotels Group. These year over year rate declines are on par with rate declines in Marriott and IHG chains. Starwood with its focus on upper upscale hotel market segment the room rate declines have been proportionately higher across the hotel chain.

Wyndham Hotels and Resorts actually saw an average daily rate increase from March 2008 to March 2009 and bucked the trend for the other hotel chains. Starwood, Marriott, and IHG all had the greatest percentage average room rate decline in its highest market segment brands. The Starwood Hotels brands of St. Regis/Luxury Collection (down 12% in US and over 25% internationally), W Hotels (about 19% globally), and Le Meridien (about 20% globally) showed double digit declines for average room rate. Marriott Hotels was down about 9% while its Ritz-Carlton luxury brand dropped room rates an average 10%. IHG held its rate average fairly well over the year compared to Starwood and Marriott.

Marriott Hotels

Marriott International

Hotel Brands,

Market Segment, and Number

(March 2009)

U.S. Average Daily Rate and 12 month rate rate change

(March 2009)

US Hotels Average Occupancy and year-to-year rate change

(March 2009)

Ritz-Carlton

Luxury

$337.03

(-10.4%)

57.0%

(-13.1)

J.W. Marriott

Luxury

(in Marriott Hotels data)

Marriott Hotels

Upper upscale

480 Hotels

$154.31

(-8.2%)

59.7%

(-5.9)

Renaissance Hotels

Upper upscale

142

$153.75

(-5.0%)

60.5%

(-6.0)

Courtyard by Marriott

Upscale

821

$117.05

(-8.9%)

59.1%

(-5.8)

Residence Inn

Extended Stay

574

$119.02

(-6.3%)

66.7%

(-5.4)

SpringHill Suites

Midscale

218

$105.24

(-5.8%)

59.2%

(-5.9)

TownePlace Suites

Extended Stay

166

$87.61

(-4.3%)

58.6%

(-7.1)

Fairfield Inn

Midscale

583

$87.12

(-5.9%)

56.5%

(-5.8)

Marriott Vacation Club

Timeshare villas

No data

Marriott Conference Centers

Upscale

No data

Marriott Executive Apartments

Upscale

No data

Bulgari Hotels

Luxury

No data

http://investor.shareholder.com/mar/releasedetail.cfm?ReleaseID=379246

Marriott International Average Daily Rates by Brand and Region – March 2009

Marriott Hotels International

Average Daily Rate

by Region for all brands

and year-to-year rate change

(March 2009)

Marriott Hotels International

Average Occupancy

by region and year-to-year decline

(March 2009)

USA/Canada

$129.44

(-7.9%)

60.2%

(-6.0)

Caribbean / Latin America

$188.32

(-4.7%)

63.6%

(-7.0)

Asia/Pacific

$142.15

(-6.1%)

59.0

(-9.2)

Continental Europe $161.87

(-4.7%)

52.1%

(-8.8)

$129.13

(-6.9%)

61.5%

(-6.0)

Middle East / Africa

$155.41

(+2.5%)

66.5%

(-9.7)

InterContinental Hotels Group US Hotels Average Daily Rates by Brand – March 2009

InterContinental Hotels Group IHG Brands	Number of Hotels (3-09) 4,202 hotels	Market Segment	U.S. Average Daily Rate and 12 month ADR rate change (March 2009)	U.S. Average Occupancy Rate and 12 month rate change (March 2009)
InterContinental Hotels	158	Upper Upscale to Luxury	$161.40 (-5.0%)	60.2% (-8.0%)
Hotel Indigo	25	Upscale	$112.13 (-11.2%)	51.3% (-0.1%)
Crowne Plaza	349	Upscale to Upper Upscale	$105.40 (-4.9%)	52.9% (-6.3%)
Staybridge Suites	157	Extended Stay	$101.66 (-3.4%)	61.7% (-6.6%)
Holiday Inn Express	1,958	Midscale	$94.40 (-2.4%)	55.3% (-5.7%)
Holiday Inn	1,342	Midscale to Upscale	$92.15 (-3.9%)	50.9% (-6.5%)
Candlewood Suites	213	Extended Stay	$69.62 (-4.0%)	61.8% (-4.6%)

http://www.ihgplc.com/files/results/results09Q1/downloads/slides09Q1.pdf

InterContinental Hotels Group IHG Brands

Europe-Middle East-Africa International

Average Daily Rate

(March 2009)

Europe-Middle East-Africa Occupancy Rate and 12 month rate change

(March 2009)

Asia Pacific

Average Daily Rate

(March 2009)

Asia Pacific

Occupancy Rate and 12 month rate change

(March 2009)

InterContinental Hotels

$223.91

(+2.5%)

55.3%

(-7.8%)

$171.13

(-8.9%)

57.3%

(-7.4%)

Crowne Plaza

$149.85

(-6.6%)

58.3%

(-3.9%)

$106.04

(-6.6%)

62.7%

(-4.3%)

Holiday Inn

$110.78

(-4.6%)

56.8%

(-4.8%)

$82.81

(-5.2%)

59.4%

(-8.5%)

Holiday Inn Express

$87.88

(-4.7%)

60.6%

(-4.8%)

$48.90

(-12.7%)

54.9%

(+2.2%)

Hotel Room Occupancy dropped globally in 2009. There are no upsides to the occupancy numbers for hotels. From the USA and Americas and other regions of Europe, Africa/Middle East, and Asia/Pacific the hotel guest numbers have dropped from 5% to 10% in all areas across all hotel brands. Ritz-Carlton in the Americas suffered a 13% drop in occupancy over the year.

The upside for the frequent guest is the ability to secure a good upgrade at low cost or even complimentary.

First quarter 2009 numbers are data compiled in February and March this year just as the stock markets were taking massive hits in value losses.

The major hotel chains went all out trying to stimulate loyalty promotion activity over the past few months. Rates continued to drop according to Smith Travel Research weekly data and occupancy also declined. The Q2 data should continue to paint a picture of lower rates for consumers. Unfortunately, my observation has been the lower revenue going into hotels has had the impact of fewer hotel staff working to handle customer needs.

Choice Hotels International US domestic data

Choice Hotels International brands

Market Segment- Number Hotels

(March 2009)

U.S. Average Daily Rate and 12 month ADR rate change

(March 2009)

March 2008 Average Daily Rate

Average Occupancy rate for Q1 2009

Average Occupancy rate for

Q1 2008

Comfort Suites

Midscale w/o F&B

560

$84.48

(-1.8%)

$86.06

47.1%

(-6.9)

54.0%

Clarion

Midscale with F&B

155 (US)

$74.03

(-7.2%)

$79.75

37.0%

(-4.4)

41.4%

Comfort Inn

Midscale w/o F&B

1,452 (US only)

$73.96

(+0.4%)

$73.70

45.9%

(-4.6)

50.5%

MainStay Suites

Extended Stay

$71.08

(+3.0%)

$69.02

50.5%

(-7.7)

58.2%

Sleep Inn

Midscale w/o F&B

366 hotels

$67.49

(-0.3%)

$67.66

44.9

(-5.3)

50.2%

Quality Inn

Midscale with F&B

926 (US)

$64.73

(-2.5%)

$66.36

39.1%

(-4.2)

43.3%

Econolodge

Economy

821

$51.65

(+1.4%)

$50.93

37.1%

(-1.4)

38.5%

Rodeway Inn

Economy

352

$49.60

(+0.2%)

$49.52

37.0%

(-3.9)

40.9%

Suburban

Extended Stay

$42.60

(+3.8%)

$41.05

52.0%

(-7.3)

59.3%

Ascend Collection

Upscale

No data

Cambria Suites

Upscale

No data

Choice Hotels bucks the prevalent trend of declining room rates from March 2008 to March 2009 with Average Daily Rate year-over-year increases for five of the nine brands with data. These brands must be managed by Cornell CHR grads. All brands still had occupancy declines.

What I find interesting about Choice Hotels is the greatest average daily rate increases were in the extended stay brands of MainStay Suites and Suburban. These two brands also had the greatest decrease in occupancy.

Concluding thoughts:

The industry is crying over the downturn in the economy and the numbers clearly reflect a significant downturn in average daily room rates and hotel guests between March 2008 and March 2009.

My sentiment is the hotel industry was skipping and laughing all the way to the bank when room rates were increasing by double-digit amounts in some locations from 2003 to 2007; well above the historical average room rate increase of the past few decades.

As a leisure traveler I was motivated to start Loyalty Traveler as an informational resource to help people needing to find a way to get major urban hotels at a discount price.

Rates are dropping in 2009, but don’t cry to me about Argentina. I paid $165 a night for the Sheraton Libertador, Buenos Aires in 2007 and that was one of the cheapest options I found for the major hotel chains. And that was $100 per night cheaper than the average rate at the chain hotels in Washington, D.C. where I ended up using Priceline to get a room for just over $100 before flying to Buenos Aires. Moscow had average rates over $400 per night two years ago. Paris and New York had astronomical hotel rates in 2008.

All you hoteliers had me worried in 2007 that the leisure traveler would be completely priced out of the upscale hotel market. Well, now the economy has forced hotels to bring prices back to earth in 2009.

The numbers show there is a need for retrenchment on the side of the hotel industry. Times are tough as a manager and as an employee hoping to retain a job.

My gut feeling, based on my labor economics background, is hotels will need to let prices fall a bit more in 2009 and 2010. Cornell’s Center for Hospitality Research may be barking “Steady as You Go” to hold rates higher in spite of the global economic recession, however, as the voice of the reasoned and seasoned traveler, I have to shout back “Enough is enough.” The new economic mantra has to become “sustainable rates for a traveling public”.

Are there really enough people with sufficient spare capital to pay $400 per night for a W Hotel or InterContinental Hotel stay? If so, then hotel chains need to start building some multi-thousand capsule bedrooms at 100 square feet for the masses who want to visit Paris, New York, or Miami during their lifetime.

Did you really think 10+ percent rate increases were sustainable? How many people make 10% raises per year? Hotels quickly priced out a large portion of the traveling population in just a couple of years.

The data I have compiled is a reality check. There are still some high average daily rates in several market segments that I do not see as sustainable in the long run for travelers. Business has cut back significantly leading to a drop in the upper high-end rates typically commanded during conferences and peak holiday seasons. I still think there is room on the low-end of upscale hotels for reducing rates more for leisure travelers.

The Economy Hotel market segment is where I predict the real damage will be felt this year and into 2010. Economy hotel prices are already low in most market segments, yet the occupancy rate is still plummeting despite average rates under $50 per night in many locations.

Average Daily Room Rate Comparison Across 44 Hotel Brands

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Average Daily Room Rate Comparison Across 44 Hotel Brands

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