Dallas Fort Worth

February 21, 2013

Chart of the week

Continued hotel recovery should fuel revenue increases

RevPAR $70 $65 $60 $55 $50 $45 $40 $35 $30 2005 2006 2007 Dallas
Source: Smith Travel Research; Jones Lang LaSalle

Occupancy 70% 65% 60% 55% 50% 45% 40% 2008 US 2009 Dallas 2010 US 2011 2012

2009 was a rough year for lodging properties. Dallas was no exception, where occupancy fell faster than the US and ended up at 51.5 percent a 7.4-percentage point decline from the prior year and almost 4-percentage points behind the US. Dallass expanding job base over the last two years bolstered occupancy significantly. As of year-end, average occupancy increased to 61.1 percent in Dallas which is now essentially on par with the US. Coming from such a low occupancy level has impacted the ability to push room rates, even in Dallas growing economy. Average daily rates slid 2.2 percent in 2010 and saw only 1 to 2 percent growth in 2011 and 2012 (compared to 4-percent for the US). Rising occupancy did allow for revenue per availably room to increase by more than 10 percent in 2011 and 4.6 percent last year. Now that occupancy has recovered to a more normal operational range, continued economic growth should translate to bottom line room rate and RevPAR increases.