• Despite hotel occupancy surging to ultra-high levels in several Asia Pacific and European markets in recent years, growth in Average Daily Rates (ADR) and Revenue Per Available Room (RevPAR) has been sluggish at best.

 

  • This has been due to a variety of factors including increased price transparency, growth in visitor numbers being predominantly driven by cost-sensitive travellers, and the addition of new hotel supply at cheaper rates.

 

  • As these trends are beyond their control, CBRE believes hotel operators must therefore focus on addressing the matters they can influence, such as differentiation, market segmentation and, most importantly, revenue management.

 

  • This ViewPoint by CBRE Hotels and CBRE Research explains why greater scrutiny of existing hotel revenue management practices is needed. Hoteliers are advised to shift their strategy away from the current approach of maintaining occupancy at ultra-high levels – a method that effectively only “buys occupancy” and may in fact be damaging the broader market.