Sep252008

U.S. Hotels Forecast: 3 Consecutive Years Declining Occupancy

U.S. Hotels Forecast: 3 Consecutive Years Declining Occupancy

HotelMarketing.com has an article with sobering hotel industry statistics for travelers.  Hotel occupancy declined by 0.3% in 2007 according to Smith Travel Research.   PKF Hospitality Research forecasts 2008 and 2009 will see even greater occupancy declines. 

Hotel stay demand is softening just as 275,000 more hotel rooms are scheduled to open by the end of 2009 compared to the end of 2007.  This is predicted to be the first time in 20 years hotels have experienced two consecutive years of occupancy decline.

Don’t make the rational conclusion that three years of declining hotel occupancy will lower average hotel rates.  The average hotel room rate for the U.S. is still predicted to rise 3.6% for all of 2008, followed by another 1.3% in 2009. 

The Good News?

Mark Woodworth, President PKF Hospitality Research, states hotel rates should not exceed the rate of inflation until 2012. 

I wonder if that considers the inflationary impact of printing $2,000,000,000,000 in money to borrow our way out of the current economic melt-down (there sure are a lot of zeros in trillions).

The Good News, Really!  Starwood Lowers Rates for Some Hotels

Looking over hotel rates here in the San Francisco region I see several Starwood hotel properties with rate drops for weekend travel.  I have predicted all year that as hotel rates increase for business travel days, Sunday through Thursday nights, the weekend rates for Friday and Saturday should decline to attract leisure travelers.  Resort locations tend to have the opposite peak period of higher rates for Friday and Saturday and lower rates Sunday through Thursday.

Starwood Hotels has 21 properties in the San Francisco Bay Area.  Recently, I have noticed rate drops at several hotels for weekend stays to some of the lowest rates in over two years.

Starwood W Hotel Silicon Valley California

W Silicon Valley has been stuck on $109 weekend rates for over two years and suddenly I see rates back down to $79.  This is an even lower rate than the limited time “Summer Sale” special offer Starwood Hotels ran last month. 

Sheraton San Jose is at $84 for many weekends over the next couple of months.  This hotel has just remodeled many of their rooms and rates had been $99 average for the past year.

California San Jose Sheraton

The Palace Hotel in San Francisco which had been going for under $150 for many weekends in 2006 suddenly jumped up to $200+ for much of 2007 and 2008.  I see November rates back down as low as $139 for weekend nights.

Starwood Hotels Palace Hotel San Francisco

There appear to be more bargains for the leisure travelers in combination with some of the best hotel loyalty program promotions of 2008.

Use the Categories link for “Fall 2008 Promotions” on the left side of the page to read about currently available promotions in all the major hotel loyalty programs.

Please leave a comment if you are seeing similar reductions in hotel rates for your area.

Hotel industry statistical data source: HotelMarketing.com U.S. Hotels to Bottom Out in 2009

Link to HotelMarketing.com

Link to Loyalty Traveler post: Hospitality Researchers Advise No Hotel Rate Cuts in 2008

 

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

More articles by Ric Garrido »

Comments

  1. Is there any news about the new rates now and for the coming 2012? Hotels around SF are really good been looking for good hotels to stay into specially for this coming holiday. This post helps me at least got few idea what to expect on hotel rate around SF. Thanks!

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