Occupancy continues to grow, albeit at a decelerated pace. Is the occupancy plateau near?

The week ending August 1st, brought US Occupancy to 48.9%, according to STR, up 1.8% over the previous week. Here we see the occupancy by week.

While this is quite an improvement from the 22% occupancy we saw back in April, the rate of growth is slowing. Over the last five weeks, we have seen the rate of growth average 1.6%, which is much lower than the rate of growth we saw over the previous 2 months of 7.8%. The chart below shows the occupancy change week to week, 15 out of the last 16 weeks have seen growth. This occupancy growth has been fueled by leisure demand, of concern is the looming end of the summer vacation period. Chris Nassetta, Hilton's CEO, mentioned in their most recent earnings call that he expects Business/Corporate demand to offset the drop in Leisure as we enter the fall. Suggesting that leisure demand is unlikely to continue at its current pace indefinately.

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Social Media + Hospitality

A recent study by The Center for Hospitality Research at Cornell University constitutes one of the first pieces of empirical research on the effect social media has on hotel purchasing decisions by different market segments. The report titled How Travelers use Online and Social Media Channels to Make Hotel-choice Decisions takes a snapshot of the rapidly changing field of how consumers gather information and make their decisions regarding travel purchases, based on responses of 2,830 recent travelers. This report is particularly helpful in that it gathered findings based on the guest's market segment and reports how a channels importance varies according to the stage in the decision process. "Business travelers often use the hotel recommended by their company, although many of them use search engines or online travel agents for their hotel search. Recommendations of friends and colleagues are less important to business travelers than they are to leisure travelers

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United Airlines' loyalty program worth $22B

United Airlines values its loyalty program at $22B, Skift reports. Opening the secret box to the industry's most valuable assets... its loyalty member audience and point currency. As the travel landscape changes, companies will have to look at ways to leverage their loyalty program members as an addressable audience in new ways without eroding trust. Not since Air Canada sold (and then bought back) its loyalty program, have we had such a public view of the revenue-generating power of loyalty. United's program generated 12% of the airline's total revenue in 2019, you bet that number will be much higher in 2020, and they will be looking for ways to continue to grow that number. Important to note that hotel companies have turned to their loyalty programs as for financing as well, by pre-selling points to their credit card partners. Both Hilton and Marriott have presold close to $1B dollars each. Will we start valuing travel companies by the size of their loyalty program

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