2. Growth by Every Measure
According to STR, a global data benchmarking company for the hotel and many other industries, total revenues for the industry were slightly more than $199 billion, increasing $9 billion from 2015, or 4.7%.
Although total 2016 revenues were a record, the industry’s three key performance metrics were just average: occupancy increased just 0.1% to 65.5%; average daily rate (ADR) increased 3.1%; and revenue per available room (RevPAR) increased 3.2%.
During Q1 2017, the total US hotel construction pipeline was 13% ahead of Q1 2016, with a total of 5,032 projects/602,034 rooms. Those under construction increased 11%; scheduled to start during the next year, +18%; and in planning, +4%.

3. A Decline in the Offing?
Room supply in the top 25 US metropolitan areas increased 2.6% during February 2017, compared to 1.6% in all other markets. Demand is already soft for these additional rooms, which could lead to eventual declines in occupancies and possibly room rates.
A similar concern is that 61% of all upper upscale rooms are being built in just 17 markets. These are typically hotels without ballrooms and meeting space; however, a growing US economy will generate more need for this space.
The number of submarkets with a negative RevPAR has been increasing quickly. During 2014, only 3% of all submarkets experienced a RevPAR decrease; however, by 2016, it was 21% and it increased again, to 38%, for February 2017.

4. Independents Remain Competitive
For 2016, independent hotel properties had better key performance metrics than chain-affiliated brands, with independents’ occupancy rate increasing 0.8%; ADR, +3.8%; and RevPAR, +4.6%.
 On the downside for independents was room supply growth of only 0.2% during 2016, compared to 1.6% for the entire industry, and an occupancy rate of 62.3%, compared to 66.8% for branded hotels.
According to a study of hotel revenues and online reviews, an independent hotel that receives 10 online reviews experienced a 1.7% increase in revenues while the branded chain’s increase was only 0.7%.

5. A Wake-Up Call About Hotel Guest Demographics
According to The Media Audit’s national survey, the primary profile of adults who stayed in a hotel/motel 10 or more times during the past year was age 50–74, 45.2%; household income $75K–$150K, 39.8%; college/advanced degree, 57.2%.
The 2017 American Customer Satisfaction Index for hotel brands shows Hilton in first place for the third consecutive year with an index of 81. Marriott and Hyatt were close seconds, with indices of 80. At the bottom of the list was Motel 6, with an index of 65.
Although slightly more men than women 18+ stayed in a hotel/motel 10 or more times during the past year in The Media Audit’s 2016 national survey, women had higher indices than man for hotel stays based on how often they flew domestically and internationally.

6. More Technology Comes to Hotel Operations
Findings from the American Hotel & Lodging Association’s 2016 Lodging Survey revealed that mobile-device check-in was available from 65% of hotels; high-speed, in-room Internet plus wireless access, 95%; and use of mobile apps for hotel services, 35%.
A March 2017 report from SiteMinder found that hotel professionals worldwide plan to increase their budgets for digital marketing and social media: high-spending level for digital marketing, 48%, and for social media, 44%.
A January 2017 report from SimilarWeb indicates that Airbnb was the #1 US accommodation Website during Q , at 87.8 million visits, a 42% increase from Q Booking.com was second, at million, and Marriott third, at million.

7. Responding to Industry Disruptors
Two major trends are impacting the two extremes of the hotel industry. First, half of the tallest skyscrapers under construction worldwide will also include a hotel. A hotel enhances the attraction of office, retail and residential residents.
Second, “poshtels” are an upscale trend of the traditional hostel. They still have communal accommodations, but many serve as a “travelers hub,” with a café, bike shop, self-service kitchen and more emphasis on local cultural events.
Major hotel brands are also finding ways to take advantage of the interest in home-sharing (Airbnb, etc.) with acquisitions, such as Expedia buying HomeAway during November 2015, and hybrid hotels that include Airbnb- type rooms and workspace.

8. Advertising Strategies
Suggest that local hotels target the farthest counties/ZIP codes in your GMA with a weekend promotion to bring more rural consumers into the city. Package a two-night stay with a choice of restaurants and entertainments.
A similar promotion could be “You Don’t Have to Go Far for a Weekend Getaway.” Highlight both the hotel’s onsite and nearby amenities that offer local consumers an experience that is just as compelling as traveling hundreds of miles for a weekend getaway.
Hotels can promote a discount to businesses whose clients stay at the hotel and meetings that occur in a hotel meeting room. The message could be “We pamper your clients, so they’re well rested and in an agreeable frame of mind for your important meeting.”

9. New Media Strategies
As more hotel guests expect an “experience,” hotels, especially independents, should consider partnering with the local culture/entertainment magazine to post stories and photos and videos from the magazine on the hotel’s social media pages.
At check-in, incentivize guests to post a review of their stay and how they were treated. Invite them to post photos/videos that show them enjoying their stay, the hotel’s amenities and nearby attractions/amenities.
Hotels, like any local business, should be actively involved in the community, and with opportunities for employees to volunteer. These activities should be captured in photos and videos and posted to the hotel’s Website and social media pages.