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Correlating ADR and Revenue Growth

Posted by Anna Ransom on Sep 9, 2015 5:37:46 PM
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The fourth in our "Why Does Placement Matter?" series examines how placement of a property in an availability list or booking window impacts average daily rate and revenue growth. Click for previous posts:

The Industry Outlook

At the Hotel Data Conference held in early August 2015, STR and Tourism Economics released their latest industry forecast. The short statement indicates that the U.S. hotel industry is projected to experience year-over-year performance increases through 2016 – great news for hoteliers looking to grow their revenue.  The details were outlined as follows:

  • 1.7% increase in occupancy to 65.5%
  • 5.1% increase in average daily rate
  • 6.8% increase in revenue per available room
  • Demand growth is expected to outweigh supply growth
  • Growth will continue in 2016, though not as strong as in 2015

Consumer Perspective

According to PhocusWright’s recently released U.S. Consumer Travel Report Seventh Edition, consumer behaviors are validating the above noted statistics as consumers are traveling more, traveling farther, and taking longer trips:

  • Big family trips are returning, often to international destinations
  • Two-thirds of adults took a leisure trip in 2014, a new 6-year post-recession high
  • Millennials are the most likely group to travel as seven in ten took at least one leisure trip in 2014

Are you on their radar?

Have you built your marketing plan to incorporate inclusion on multi-property availability and hotel listing displays? Beyond just being included in the listing, do you know where your property ranks? Statistics show that where you rank clearly makes a difference. In this series we’ve reviewed many ways that preferential placement has an impact.  Let’s consider how it impacts ADR and Revenue.


How preferential placement impacts ADR and Revenue

Our analysis of properties enrolled in Amadeus Instant Preference (AIP) in comparison to those not enrolled provides us with interesting data. 

ADR_RevenueCombined

On average, those enrolled in AIP have an ADR that is nearly 20% higher than the ADR for all Amadeus properties.  Additionally, on average, enrolled properties experience a faster increase in revenues and a slower decrease in ADR.  This would mean that these properties have a greater ability to adjust ADR pricing without jeopardizing revenue. 

Consider how you can increase your opportunity for revenue growth with Amadeus Instant Preference!

Learn more about preferential placement with AIP.

Download the full report

Topics: Amadeus Instant Preference