STR considers three metrics key to measuring the hotel industry's performance: occupancy, average daily rate (ADR) and revenue per available room (RevPAR). Data shows that hotels in metro Charlotte posted growth across those three measures albeit at a slower rate than both 2015 and 2014.
In 2016, occupancy grew an average of 2%, increasing to 72.2%. That compares to average gains of 2.7% in 2015 and 7.1% in 2014. Meanwhile, ADR rose an average 4.5% to $105.53 last year versus increases of 6.2% and 6.5% in 2015 and 2014, respectively. Also in 2016, gains in RevPAR — rising 6.7% to $76.15 — came in at a lower pace than 9% in 2015 and 14.1% in 2014.
Here is a look at how supply, demand and revenue figures posted by Charlotte-area hotels last year compared to 2015 and 2014:
- 2016: Supply up 1.1%, demand up 3.1%, revenue up 7.8%
- 2015: Supply up 0.2%, demand up 2.9%, revenue up 9.2%
- 2014: Supply up 1.1%, demand up 8.2%, revenue up 15.2%
“The Charlotte market performed at record levels in 2016 even with a slower rate of growth than the previous two years,” STR senior vice president of operations Bobby Bowers said in a statement sent to CBJ. “Slowing growth is common as the comparison base rises each year.
"With occupancy levels well above the national average, it is not surprising to see Charlotte ranked highly on the list for projected openings in 2017. It will be interesting to see how that new supply will affect performance moving forward.”
March was the only month that each of the three metric recorded decreases, ranging from -0.5% to -4.3%. While values for ADR and RevPAR increased every month but March, occupancy drops were tallied in September (-0.6%), November (-2.3%) and December (-1.9%). Declines in occupancy toward the end of the year could be reflected by the Atlantic Coast Conference's decision to move its football championship game from Charlotte's Bank of America Stadium to Orlando. That game was scheduled on Dec. 3 and had been held in the Queen City since 2010.
The 2017 NBA All-Star Game, slated for February, is another lost event to deal a blow to Charlotte hoteliers, restaurateurs, event venue operators and others in the local hospitality industry. They've also voiced concern about future events refusing to consider Charlotte until HB2 is repealed.
As for the nation's hotel industry as a whole, STR said that occupancy remained flat, growing just 0.1% to 65.5%, while ADR rose 3.1% to $123.97 and RevPAR increased 3.2% to $81.19.
“In general, we view 2016 as an average year for the U.S. hotel industry,” said Amanda Hite, STR’s president and CEO, in a press release. “The three key performance metrics hit record highs, but at the same time, RevPAR growth was just below the 30-year U.S. average (+3.3%). Looking ahead in 2017, we expect that growth to decelerate further as supply overtakes demand in terms of growth.”
Supply and demand grew 1.6% and 1.7%, respectively, with both categories also setting records.
Jenna Martin
Digital Producer, Charlotte Business Journal