| Let's see what STR says about 2011 through 2013 as of the ALIS Conference, January 2012
So, our revpar growth in 2011 was fueled by a robust and higher increase in demand than in rate. Overall, the estimates for 2011 and for growth for 2012 (by STR) have risen at an increasing pace over the year: as early as November, the projections were for a +3.9% gain (now 4.3%) in revpar for 2012, 7.7% (now 8.2%) for 2011. Interestingly, there was disparity in the relative demand within each chainscale. 
As the above graph indicates, there was a drop in demand in the midscale segment: however, the reclassification of Best Western hotels resulted in an even greater drop in supply which caused a relative increase in demand (of 3.2%) for this segment. The Upper Midscale segment experienced an incremental demand of 5.5%, Upscale's incremental demand was 4.2%, etc. For the ADR story, here's the breakdown by chainscale: 
Midscale had a drop in rate while Upper Midscale experienced a decent 3.3% gain, Upscale came in at 3.3%. Overall, occupancy contributed greater to revpar growth than did rate. 2012: a rather different scenario - limited supply growth and limited demand growth will result in a very minimal 0.5% growth in occupancy: rate is projected to grow at 3.8%, comparable to 2011. Now all this really means less than what's happening in your neighborhood: if there is supply increase in your back yard, your story will be quite different. How will this break out across the chainscales? Will ADR growth mirror the picture of 2011? If so, strategies will have to be tailored quite differently within the chainscales and, more so, within respective market segments. - Group rate will likely be a drag on overall ADR, particularly for those who have pre-booked larger groups well in advance
- Transient ADR will grow at a faster pace. Here the opportunity is stronger - the window is short, no negotiated rates so you can yield and fence your rates for maximal revenue.
How will your hotel fare? Have you calculated the relative contribution of each of your LNRs on the overall rate? Groups? Transient traffic impact on ADR after your price shifts? Channel Contribution OTAs - what a story! At around 8% of contribution, they certainly occupy a greater proportion of mind-share. More importantly, the contribution shows that around half of all contribution is property based: in fact, the recent study by the Estes Group and STR showed that this segment is higher at the midscale level (66%) and drops as you climb scales. That fact points to the criticality of maximizing property based contribution - this typically comes in at around 75%-80% of the brand.com rate, and is, therefore, a drag on overall ADR. Front Desk training, on-site strategies, a meaningful and strategic sales program to manage market segmentation are all vital components in the plan to drive rate. A bit from each bucket will get you to the target. 
Here are links to some of my prior newsletter which describe various strategies: A New Service to Ease Your Mind If you have questions about how effectively your properties may be implementing various strategies, or what strategies are not being implemented, RevMax now offers you an opportunity to find out - an inexpensive assessment that will clearly identify lost potential. Remember - approximately 75% of all incremental revenue flows to the NOI line. Call me
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