Faculty & Research
Natural Occupancy Rates and Development Gaps-- A Look at the U.S. Lodging Industry
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Vol 40 No 2
By: Jan A. DeRoos
Executive Summary: An analysis of hotel demand using a calculation of "natural occupancy rates" can show whether a particular market's supply may be overreaching demand. Using 11 years of occupancy data from Smith Travel Research, the analysis found a natural occupancy rate of 62.9% for US hotels as a group. The analysis further found that specific US markets with steeply seasonal occupancy had a lower natural occupancy rate than those with relatively steady month-to-month demand. Additionally, a market with relatively low average daily rates (ADR) has a higher natural occupancy rate than a market where high ADRs give operators strong revenues from a relatively few occupied rooms.
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- Natural Occupancy Rates and Development Gaps-- A Look at the U.S. Lodging Industry By: Jan A. DeRoos
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