Minnesota’s Lodging Industry Growth Varied during the First Half of 2014
Release Date: Nov 04, 2014
Please click below to view a more recent lodging report:
"Lodging Performance Through the Third Quarter of 2014"
This article and graphs are provided under permission granted by STR (Smith Travel Research, Inc.), the source of the data.
Minnesota’s lodging industry experienced year-over-year first half 2014 growth in all six metrics tracked by STR, but saw considerable variation within the period. This included declines in monthly growth from February through April, followed by a return to stronger growth in May and June. Minnesota’s lodging performance surpassed U.S. and regional first half 2014 growth rates for two metrics, room supply and room rates. Two sets of graphs, with links below, show changes in Minnesota’s lodging metrics for the first half of 2014 and monthly changes for the last 12 months.
First Half 2014 Lodging Performance Changes for Minnesota, the U.S., the Region and Minnesota Areas – Minnesota saw growth in all six tracked lodging metrics during the first half of 2014, compared with the first half of 2013. This included strong 7.8% growth in revenue, attributable to combined growth in both demand (3.5%) and average daily room rate (4.6%). Relatively strong growth in room supply (1.5%) contributed to more modest growth in occupancy (1.5%) and revenue per available room (i.e., RevPAR, 6.2%). Despite the positive report overall, Minnesota’s first half growth was exceeded by U.S. and regional (i.e., the seven-state West North Central U.S.) growth in four of six metrics, with the exceptions being room supply and room rates. Minnesota’s first half 2014 growth was also weaker than first half 2013 growth for all metrics except room supply and room rates. Within Minnesota, first half growth for the Minneapolis-St Paul Metro area was stronger than Greater Minnesota’s growth for all metrics. Three of Minnesota’s 11 distinct market areas (i.e., five in the Metro and six in Greater Minnesota) experienced double-digit growth in both revenue and revenue per available room. The three were Bloomington, the Minneapolis South Area and Mankato. Duluth was the only area to experience negative growth in both demand and occupancy, while Minneapolis also saw a first half decline in occupancy despite strong demand growth, attributable to continued strong room supply growth.
Year-over-year first half changes in Minnesota lodging metrics (i.e., 2014 compared with 2013) and 2013 compared with 2012 (in parentheses) were:
- Occupancy 1.5% change for 2014 (5.8% for 2013)
- Room supply 1.5% (0.0%)
- Demand 3.0% (5.8%)
- Revenue 7.8% (8.5%)
- Room rate 4.6% (2.5%)
- Revenue per available room (RevPar) 6.2% (8.5%)
Month-by-Month Lodging Performance for Minnesota – Minnesota lodging experienced positive year-over-year monthly growth for all six tracked metrics during 11 of the 12 months spanning July 2013 through June 2014. The exception was April, which saw negative growth in occupancy (-4.7%), supply (-3.4%) and revenue per available room (-1.0%) and marked the low point of a three month downhill slide for these metrics. It is worth noting that April 2013 (i.e., the base of comparison for April 2014) was one of the strongest months of growth for Minnesota lodging performance in recent history. Following the low point in April 2014, solid growth for the metrics resumed in May and June. Aside from the big dip in April, most lodging metrics have seen modest fluctuations in monthly growth over the past 12 months. Room supply experienced increases in monthly growth from September through February, before seeing progressively smaller growth starting in March.
Click below for accompanying graphs of Minnesota lodging performance (repeats of links from above):
- First Half 2014 Lodging Performance Changes for Minnesota, the U.S., the Region and Minnesota Areas
- Month-by-Month Lodging Performance for Minnesota Month-by-Month Lodging Performance Changes for Minnesota
In addition to these graphs, detailed June and year-to-date lodging metrics for Minnesota can be viewed online for a limited time at Current STR Lodging Metrics for Minnesota. (Note: The most current available monthly lodging metrics are replaced by data for the subsequent month when they are provided by STR.)