Minnesota 2010 Lodging Performance
Release Date: Feb 10, 2012
This article and graphs are provided under permission granted by STR (Smith Travel Research, Inc.) – the source of the data.
Minnesota’s lodging industry ended the year on a positive note, with December and annual year over year growth statewide for each of six reported lodging metrics. Minnesota’s December monthly growth in four metrics exceeded both national and regional growth by at least 2 percentage points, including room revenue (+11.8%), revenue per available room (i.e., RevPAR; +11.0%), demand (+9.5%), and occupancy (+8.6%). Minnesota also saw a continuation of recent growth in December in room rates (+2.1%; similar to national and regional levels) and room supply (+0.8%; slightly less than national and regional growth rates). Two sets of graphs, with links below, show 2010 annual and monthly changes in lodging metrics.
2010 Lodging Performance Changes for Minnesota, the U.S., the Region and Minnesota Areas –Minnesota experienced annual growth in all six reported lodging metrics, including 6.5% in occupancy and 6.6% in RevPAR – growth rates similar to and slightly higher than growth rates for the U.S. and the region (i.e., the seven-state West North Central U.S.). Also, all 10 of Minnesota’s distinct market areas (i.e., five in the Minneapolis-St Paul metro and five in Greater Minnesota) experienced growth in at least four of six metrics (i.e., occupancy, demand, revenue and RevPAR). Only Bloomington (-2.2%) showed an annual decline in supply, and four markets had annual declines in average room rates. For the year, lodging metrics for the Minneapolis-St Paul metro markets generally showed stronger growth when compared with non-metro markets. However as the year progressed, the metro versus non-metro distinction broke down. Generally speaking, the markets that showed the strongest growth in lodging metrics during 2010 were the same markets that showed the biggest declines in 2009.
Annual changes in Minnesota lodging metrics for 2010 (i.e., compared with 2009) and 2009 were:
- Occupancy +6.5% for 2010 (-7.9% for 2009)
- Supply +1.0% (+2.5%)
- Demand +7.5% (-5.6%)
- Revenue +7.7% (-12.1%)
- Room rate +0.2% (-6.9%)
- RevPar +6.6% (-14.3%)
2010 Month-by-Month Lodging Performance Changes for Minnesota – Minnesota’s consistent growth in year over year monthly lodging metrics throughout 2010 contrasted markedly from the prolonged period of decline that preceded it. The welcomed improvement during 2010 has helped the industry gain back some of the losses experienced during the recession. Persistent, if varying, monthly demand growth and room rate growth since spring combined with lower supply growth to produce higher growth in occupancy, revenue and RevPAR as the year progressed. June and November stood out as the strongest growth months of the year for Minnesota’s lodging industry. A steady decline in room rates persisted beyond the turnaround in other metrics, moderating for the first few months of the year and only turning positive for the first time in May. Minnesota’s room supply growth declined from 2.1% in January to a low of 0.4% in August and September, before strengthening again each month through the end of the year. Room supply is typically the last metric to adjust to changing economic conditions due to the time lag associated with lengthy construction projects.
Click below for accompanying graphs of Minnesota lodging performance (repeats of links from above).
Minnesota’s Lodging Industry Performance, Full Year 2010