For the second year in a row, North Carolina’s lodging industry posted record demand for accommodations. Recent data released by Smith Travel Research (STR) shows that 2013 room demand was up nearly three percent from 2012 with more than 31 million room nights sold in the state. Since 2005, room demand is up more than ten percent. Room demand nationally and in the southeast region increased 2.2 percent from 2012 to 2013. Room demand is defined as the number of rooms sold excluding complimentary rooms.
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Also setting a new record in 2013 were North Carolina room rates. Statewide average daily rates (ADR) for the year were up 2.2 percent to nearly $87. Rates have increased more than 24 percent since 2005. With the exception of September, which was adjusting back to post-DNC September rates, each month of 2013 set a record high ADR for that particular month. February and December rates were four percent higher than 2012 rates, and posted the highest year over year growth. ADR at the national and regional level had slightly higher increases of 3.9 percent and 3.0 percent respectively.
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Hotel/motel occupancy in 2013, at 58.3 percent, was up 1.7 percent statewide from 2012, similar to the growth seen at the national (+1.5 percent) and regional (+1.9 percent) levels. Though occupancy in the state is still down about three percent from the peak in 2007, occupancy rates have increased eight percent in the last three years.
It is important to note the direct correlation of room occupancy to supply and demand. While demand hit record levels last year, as noted above, room supply growth in North Carolina also increased the most last year that is has since 2010 (+1.1 percent), and there is more room inventory in the state now than there has ever been. Thus even though demand is at record highs, room supply growth holds occupancy growth down somewhat. Room supply growth in North Carolina outpaced national (+0.7 percent) and regional (+0.3 percent) growth last year.
Statewide, revenue per available room (RevPAR) was up 3.9 percent from 2012, topping the peak set in 2007. RevPAR has increased eighteen percent in the last three years. Nationally, RevPAR was up 5.4 percent from 2012. South Atlantic states RevPAR was up 5.0 percent from 2012.
North Carolina hotel/motel room revenues were up 5.0 percent in 2013 from 2012, topping $2.7 billion and topping the previous high set just last year. Statewide room revenues have increased nearly thirty-seven percent since 2005. This is due in part to the increased ADR from 2005-2007, and a resurge beginning in 2011. However, the last several years of positive growth in demand has also contributed to the increased revenues. Nationally, room revenues were up 6.2 percent and in the South Atlantic states, room revenues increased 5.3 percent from 2012 to 2013.
Regionally within the state, the lodging sector continues to perform well, particularly in the Western Region. Room demand was up 5.1 percent in the Western Region from 2012 to 2013, and room revenues were up over ten percent. The Triangle Region also saw very positive demand (+4.1 percent) and revenue (+6.3 percent) growth.
The outlook for lodging continues to be positive according Smith Travel Research. Amanda Hite, STR’s president and COO, notes that “the industry will continue with favorable supply and demand conditions that will position the industry to see RevPAR growth.” In 2014, STR forecasts that occupancy will grow 1.3 percent nationally, while ADR is expected to increase 4.6 percent.
To find out more about the national lodging statistics, click here.
To view more trend data for the N.C. lodging industry, click here. For more information contact Research Manager Marlise Taylor at (919) 733-7278.