Minnesota’s Lodging Performance through the 1st Half of 2012
Release Date: Aug 13, 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 experienced moderate improvement through the 1st half of 2012, at a rate that was nearly identical to the improvement reported for the 1st quarter of the year. The industry saw year-over-year growth in five of six reported metrics, and a small 0.5% decline in the sixth metric -- room supply. The year-over-year 1st half change for all six metrics was lower than the year-over-year change a year earlier (i.e., 1st half of 2011 compared with 1st half of 2010). On a month-by-month basis, January saw year-over-year declines in demand and occupancy that were followed by growth in February and March; and the pattern was repeated starting with demand and occupancy declines in April that were followed by relatively stronger growth in May and June. Continuous growth in room rates produced revenue growth on a statewide basis for all months of 2012, except April.
Compared with Minnesota, the seven-state West North Central U.S. region that includes Minnesota experienced stronger year-over-year 1st half 2012 growth. The region's growth was similar to or stronger than U.S. growth for all six metrics. Lodging in the rest of the region was slower to recover from the recession initially, but is sustaining a higher level of growth as the recovery progresses. Two sets of graphs, with links below, show changes in Minnesota's lodging metrics during the 1st half of 2012.
First Half 2012 Lodging Performance Changes for Minnesota, the U.S., the Region and Minnesota Areas - The 1st half 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 1st half year-over-year annual 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. Overall, Greater Minnesota's lodging metric changes were more positive than changes for the Minneapolis-St Paul Metro area during the 1st half of the year, though there was considerable variation across both Metro and Greater Minnesota areas.
First half 2012 changes in Minnesota lodging metrics (i.e., compared with 2011) and 2011 compared with 2010 were:
- Occupancy 0.8% for 2012 (5.7% for 2011)
- Supply -0.5% (0.7%)
- Demand 0.3% (6.4%)
- Revenue 3.2% (10.0%)
- Room rate 2.9% (3.3%)
- RevPar 3.7% (9.2%)
Month-by-Month Minnesota Lodging Performance Changes through June 2012 - Minnesota's growth in year-over-year monthly lodging metrics was fairly strong and consistent for most metrics through the 3rd quarter of 2011. (July was the exception, presumably attributable to the 20-day state government shutdown.) Then, starting in October and continuing through April of 2012, growth slipped in all six metrics before picking up slightly in May and June.
Click below for accompanying graphs of Minnesota lodging performance (repeats of links from above):