Minnesota Lodging Performance through Three Quarters of 2010
Release Date: Nov 04, 2010
This article and graphs are provided under permission granted by STR (Smith Travel Research, Inc.) – the source of the data.
Minnesota and Minneapolis-St Paul lodging performance metrics continued their trend of year-over-year improvement through the first three quarters of 2010, according to a recently-released STR report. Two sets of graphs show 2010 year-to-date lodging performance changes for Minnesota and other geographic areas; and shows monthly changes in statewide lodging performance for January through September 2010. The time period in 2009 that is used as the basis of comparison was a very down time for the lodging industry.
September marked Minnesota’s ninth consecutive month of year-over-year positive change in occupancy (+7.6% change for September 2010, compared with September 2009) and revenue (+9.1%), and its seventh consecutive month of positive change in revenue per available room (i.e., RevPAR, +8.7%). Room rates returned to positive growth in September (+1.0%), after a 1.0% decrease in August. Year-to-date, average room rate change is the only Minnesota lodging metric that remains negative (-0.4%). After a drop-off in August, Minnesota's September monthly change metrics were again more positive than the 7-state West North Central Region and similar to levels for the U.S. September and year-to-date change metrics for the Minneapolis-St Paul market were even more positive than Minnesota's.
Within Minnesota, the five areas in the Minneapolis-St Paul market generally continue to outperform the five areas in Greater Minnesota. The five highest year-to-date occupancy changes and four of the five highest year-to-date changes were recorded in Minneapolis-St Paul areas. Nonetheless, the metro versus non-metro spread is diminishing as the economic recovery progresses, and fewer negative numbers appear for Minnesota areas.
Minnesota (+1.1%) and the Minneapolis-St Paul market (+0.7%) continued to trail the region (+1.3%) and the U.S. (+2.2%) on change in room supply through the third quarter. Room supply growth has slowed throughout the year, as the time lag associated with lengthy construction projects adjusted to the economic downturn.
To gain perspective on just how different lodging metrics for the first three quarters of 2010 were from the same period of 2009, it is instructive to look at Minnesota’s lodging performance a year ago when lodging metrics were still negative and improvement was just over the horizon. The only positive monthly lodging metrics that had been recorded at any point during the first three quarters of 2009 (i.e., monthly for January through September 2009) were for room supply. Year-over-year declines in other metrics for the first three quarters of 2009 included -9.8% for occupancy, -7.3% for room rates and -16.4% for RevPAR. Given this backdrop and basis for comparison, positive changes were badly needed to start gaining back some of the losses that occurred up through a year ago. Indeed the recent positive growth has accomplished some of that recovery, but there is still a ways to go to get back to pre-recession levels of lodging performance.
Year-to-date (YTD) MN occupancy change: 5.9% for 2010 (compared to 2009) versus -9.8% for 2009 (compared to 2008)
- YTD MN supply change: +1.1% for 2010 versus 2.7% for 2009
- YTD MN demand change: 7.1% for 2010 versus -7.4% for 2009
- YTD MN revenue change: 6.7% for 2010 versus -14.2% for 2009
- YTD MN room rate change: -0.4% for 2010 versus -7.3% for 2009
- YTD MN RevPAR change: 5.5% for 2010 versus -16.4% for 2009
Click below for accompanying graphs of Minnesota lodging performance (also linked in first paragraph above):
Minnesota’s Lodging Industry Performance, First Three Quarters of 2010