Minnesota Lodging Continues Moderate Recovery in 3rd Quarter
Release Date: Nov 14, 2012
Minnesota’s Lodging Performance through the Third Quarter of 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 continued its previous moderate rate of growth through the third quarter of 2012, with year-over-year gains in five of six reported metrics, and a small 0.5% decline in the sixth metric – room supply. However, the year-over-year change for all six metrics was lower than the year-over-year change a year earlier (i.e., the first three quarters of 2011 compared with the first three quarters of 2010). Within the third quarter of 2012, August saw the strongest overall year-over-year monthly changes, with July showing similar but slightly weaker changes, and September posting the weakest monthly changes since April.
Compared with Minnesota, the seven-state West North Central U.S. region (i.e., including Minnesota) experienced stronger year-over-year growth in the first three quarters of 2012 for all six lodging metrics. The region’s lodging performance over this period was very similar to that of the U.S. overall. Compared with Minnesota, lodging in the rest of the region was slower to recover from the recession initially, but is sustaining a higher level of growth than is Minnesota as the recovery progresses. Two sets of graphs, with links below, show changes in Minnesota’s lodging metrics during the first three quarters of 2012.
Lodging Performance Changes through the Third Quarter of 2012 for Minnesota, the U.S., the Region and Minnesota Areas – The first three quarters of 2012 saw U.S. and regional growth rates exceed Minnesota’s growth for all six metrics. Within Minnesota, nearly all of Minnesota’s 10 distinct market areas (i.e., five in the Minneapolis-St Paul Metro and five in Greater Minnesota) experienced annual year-over-year growth in revenue, room rates and revenue per available room (i.e., RevPAR). However, each of the other three metrics (i.e., occupancy, supply and demand) saw declines for a number of Minnesota areas, with the declines concentrated in the Metro region. For the Metro region overall, a decline in supply (-0.9%) was accompanied by declines in occupancy (-0.4%) and demand (-1.3%). The third quarter of 2012 saw divergence between stronger Greater Minnesota’s lodging metric growth and weaker Minneapolis-St Paul Metro growth/declines.
Year-to-date through September 2012 changes in Minnesota lodging metrics (i.e., compared with 2011) and 2011 compared with 2010 were:
- Occupancy 1.2% for 2012 (4.7% for 2011)
- Supply -0.4% (0.5%)
- Demand 0.8% (5.2%)
- Revenue 3.6% (9.7%)
- Room rate 2.2% (4.3%)
- RevPar 3.6% (9.1%)
Month-by-Month Minnesota Lodging Performance Changes through September 2012 – Following relatively weak growth in year-over-year monthly lodging metrics since January 2012, Minnesota’s lodging performance generally picked up in May and June, followed by continued moderate growth in July and August. This was followed by a drop-off in September that included the weakest monthly changes since April. Following nearly two straight years of monthly increases in room rates, the year-over-year August room rate growth was barely positive at 0.1%. Still, with the exception of April, Minnesota has experienced revenue growth on a statewide basis in every month of 2012.
Click below for accompanying graphs of Minnesota lodging performance (repeats of links from above):