Room rates at Marriott International’s North American hotels rose for the first time in two years during the month of May, another sign that the lodging industry is creeping out of its slump.
Room rates for Marriott’s company-operated properties in North America in May rose 1 percent against year-ago period. Revenue per available room rose 9 percent during this same month.
In the second quarter, which runs from March 27 to June 18, rates were flat compared with the same period a year ago, while revPAR rose 7.3 percent.
There is growing optimism in the lodging industry that fundamentals are not only on the mend, but improving at a pace much quicker than expected. Last year, the hotel industry saw revPAR slump an unprecedented 16.7 percent.
Bookings have increased at high-end and luxury properties and top markets such as New York City have been better able to raise prices, analysts and executives have said.
At the New York University Hospitality Conference this week, Marriott Chief Operating Officer and President Arne Sorenson told attendants that he is “wildly optimistic” about the hotel industry over the next few years.
In a later interview with Reuters, Sorenson cautioned that “we shouldn’t assume every month from here on will be positive.” Concerns over the euro and the recent slump in the stock market could be among the factors that ebb travel demand in some months.
But Sorenson added that the hotel industry will see an improvement over time as the economy emerges from a recession. Over the next few years, overall hotel results would likely be “fabulous,” he said.
Marriott shares rose 3.4 percent to $32.14 on the New York Stock Exchange, roughly in-line with a 3.5 percent jump in the Dow Jones U.S. Hotels index.