Manhattan occupancy, RevPAR post strong Q1: PwC

Manhattan’s occupancy levels saw significant improvement during the first quarter of this year while ADR continued to recover slowly, resulting in a robust increase in RevPAR levels, according to the latest edition of the PwC Manhattan Lodging Index.

During the first quarter of 2012, Manhattan’s occupancy levels increased 6.7% to 76.9%, continuing the trend seen in the second half of 2011. Manhattan hotels continued to regain pricing power, although at a slower rate, resulting in a 1.4% increase in ADR. This combination led to an 8.2% increase in RevPAR in the first quarter, compared to year-ago levels.

All segments experienced increases in RevPAR from year-ago levels during the first quarter, driven in most cases by a combination of occupancy and ADR growth. The upper-midscale segment ended the first quarter with the highest increase in RevPAR, experiencing a 14.5% improvement over the prior year period, due to a 9.2% increase in occupancy, coupled with 4.8% growth in ADR. The upper-upscale, luxury and upscale segments experienced RevPAR increases of 8.7%, 6.3% and 5.9%, respectively, with the luxury segment being the only segment experiencing an ADR decrease for the quarter.

Limited-service hotels exceeded full-service hotels in RevPAR growth during the quarter, up 10.5% and 7.6%, respectively.

Independent hotels outperformed chain-affiliated hotels in RevPAR growth, with independents experiencing a 9.6% increase, compared to a 7% jump for chain-affiliated hotels. While the RevPAR growth for both chain-affiliated and independent hotels was driven by a combination of occupancy and rate growth, independent hotels were better able to increase rates, leading to stronger RevPAR growth.