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Hotel Industry Demand, Room Rates Surged In Q3 2012

Written by Tim Morral
Published: 9/20/2012

Exceptionally robust sales in the hospitality industry may be a bellwether of a strengthening U.S. economy.

The U.S. hotel industry sold more rooms in July 2012 than it has during any single month since 1987, according to a new report issued by Smith Travel Research (STR).

Hotel Room Rates Increasing

Demand for hotel rooms increased 1 percent in July to 1.06 million roomnights. This surpasses the July 2011 record of 1.05 million roomnights and may indicate that the economy is continuing to rebound despite concerns of another economic slowdown. Total hotel industry occupancy rose 0.5% to 70 percent during the same time period.

"The industry sold more rooms in the month of July than in any other single month since STR began tracking industry performance in 1987," said STR's COO Brad Garner. "Record levels of demand will continue to stimulate ADR growth, particularly as group rooms sold firms in the historically heavy convention months of September, October and November."

The change in demand for lodging is likely a factor of increasing consumer incomes as well as changing attitudes about disposable income. As the economy strengthens even further, it is expected that the demand for hotel rooms will continue to rise well beyond the fourth quarter.

The STR occupancy study comes on the heels of other recent reports by the hotel pricing website,, and TravelClick, a provider of software solutions for major hotel chains. These studies showed that the average U.S. hotel rate increased by as much as 17 percent from summer 2011 to summer 2012, due to increased demand from vacationing consumers and business travelers.

"Business and leisure travel demand through the end of the year is strong and has pushed up daily rates," said Tim Hart, executive vice president of research and development at TravelClick.

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