Originally Posted by delts145
Rick, Here's a few blurbs and a couple of articles that give some us an idea of the ongoing occupancy rates and hotel industry health, particularly in the Salt Lake Market. The last article is a little lengthy, but it is extremely interesting and informative.
Oct 24, 2006 - Hotel occupancy rates increased in September
Deseret News (Salt Lake City), Oct 24, 2006
E-mail Print Link More Utah hotel rooms were occupied in September as daily room rates climbed, according to the Rocky Mountain Lodging Report.
The occupancy rate for Utah hotels was 72.4 percent in September, up from 66.8 percent in September 2005.
The statewide average daily room rate rose to $83.34 for the month, up from $74.35.
In Salt Lake City, occupancy rates in September were 76.9 percent, up from 70.3 percent a year ago, with rooms averaging $87.17, up from $77.30.
Utah hotel occupancy, rates rose in 2006, report says
January 23, 2007 Deseret News,
Utah's hotel occupancy rate rose to 68.3 percent in 2006 from 65 percent in 2005, according to the latest Rocky Mountain Lodging Report.
The report, which is compiled in cooperation with the Utah Hotel & Lodging Association, showed the average room rate statewide also increased to $86.27 last year from $75.90 in 2005, although some of that jump was due to the addition of several new resorts to the survey in 2006.
Occupancy for Salt Lake hotels increased to 72.4 percent in 2006 from 69.1 percent in 2005, while the average daily room rate rose to $84.17 from $76.86 year-over-year. Revenue per available room also increased to $60.92 from $53.12 for Salt Lake properties.
Hotel occupancy rate in Utah rose in May - June 19, 2007
The occupancy rate at Utah hotels in May averaged 65.4 percent, up from 62.5 percent in May 2006, according to the Rocky Mountain Lodging Report.
The average daily rate rose to $85.67 in May, up from $75.51 a year ago during the same month.
Utah's hotel industry booming
As occupancy rates rise, analysts see need for big project in downtown S.L.
By Dave Anderton
Deseret Morning News
Published: Friday, Jan. 27, 2006 3:57 p.m. MST
A killer virus, the war in Iraq and terrorist attacks once jolted confidence in U.S. travel safety. Now, a strong economic recovery and fond memories of 2002's Salt Lake Olympic glory are erasing old fears and boosting Utah's hotel industry.
In fact, Salt Lake's hotel rooms are filling up fast.
In 2005, the city's overall occupancy rate climbed to 69.1 percent, up from 62.9 percent in 2004, according to the Rocky Mountain Lodging Report, which tracks hotel trends in Utah, Colorado, Wyoming and New Mexico.
The 2005 rate is approaching those of the 1990s, when occupancy rates for the city floated in the mid-70 percent range. In 1994, Salt Lake's occupancy rate climbed to 80.1 percent, its highest ever, according to Robert Benton, sponsor of the lodging report.
"You are at an occupancy level where developers are going to start looking at the market and start looking at new projects and planning for new projects," Benton said. "Occupancies in Salt Lake have been improving since the 1999-2000 period. The market is not overbuilt."
SLC Occupancy rates of between 70 percent and 75 percent are considered good for a typical hotel, Benton said. Rates surpassing 80 percent indicate an establishment can raise room rates.
Salt Lake's occupancy rate in 2005 outperformed Albuquerque, which ended the year at 64.8 percent, and Denver at 64.1 percent, the lodging report said.
In addition to higher occupancies, average room rates for Salt Lake City also increased in 2005 to $76.85, up from $75.71 a year earlier.
"People remember Salt Lake City, but you've also had good snow. You had a record number of skier days last year," Benton said. "Commercial travelers are coming back. Now you've got group business coming back. The leisure market is coming back."
Steve Lindburg, general manager of the Hilton Salt Lake City Center and past president of the Utah Hotel and Lodging Association, said Salt Lake's hotel industry is healthy and growing.
"We became overbuilt just before the Olympic Games," Lindburg said. "In the years since then, we're starting to see a good balancing point. I think what we are going to see is demand is going to keep creeping up as long as the economy keeps going."
Lindburg said he considers an occupancy rate less than 65 percent a "bad" rate. The 499-room Hilton is currently running at a 72 percent occupancy rate, Lindburg said. Its average room rate was up 11 percent in 2005 compared to 2004.
"What we are seeing now is the average rate people pay for a room is actually growing pretty significantly," Lindburg said. "I think we are seeing positive demand growth as we move into 2006 and beyond.
"The business traveler is definitely back in a big way, and now what we are starting to see is the leisure traveler is starting to come back. I think what we are going to see is more folks getting out for long weekends."
Not As Great in 2008 for US Hotels, (with a few exceptions, such as Austin and Salt Lake City)
PKF Hospitality Research
Tuesday, 18th December 2007
Research is reaffirming a forecast for a modest slowdown in US lodging industry performance in 2008.
For the year PKF Hospitality Research, (PKF-HR) is projecting occupancy levels to experience a slight decline (-0.7 percent), while average daily room rates (ADR) should grow 5.3 percent.
The net result is a 4.5 percent gain in revenue per available room (RevPAR), the slowest pace of RevPAR growth since recovering from the 2001 to 2003 industry recession. While the PKF-HR forecast calls for a deceleration in the pace of revenue growth, it should be noted that the 4.5 percent RevPAR growth rate is still above the Smith Travel Research long-term average of 3.4 percent. These findings come from the recently released fourth quarter edition of Hotel HorizonsSM, the quarterly lodging forecast report produced by PKF-HR.
...On the consumer side, PKF-HR does not foresee an imminent catastrophic economic recession that would have a negative impact on lodging demand. “We are concerned that the residential credit-crunch might have a negative impact on leisure travel patterns in the summer of 2008. Fortunately, corporate profits continue to support commercial lodging demand and should mitigate any fall-off in leisure demand,” Woodworth concluded.
Buying, Not Building
While the total pipeline of planned hotel projects is at an all-time high, only a small number are actually breaking ground. The high costs of construction and land, combined with firmer capital market discipline, have helped to control the volume of new supply additions. In many instances, the purchase and renovation of an existing hotel continues to be more feasible than the construction of a new property.
“Given our analysis of current hotel construction activity, PKF-HR is forecasting a 2.6 percent increase in lodging supply in 2008, or approximately 115,000 new hotel rooms. This is the greatest annual supply increase since 2000, but still less than the 150,000 new rooms added in both 1998 and 1999,” Woodworth noted.
Most of the new supply in 2008 will enter the Upscale and Midscale without Food and Beverage segments of the industry. Properties in these categories typically contain a limited amount of public space that makes them relatively cost-effective to build. Conversely, PKF-HR is forecasting an 11th consecutive year of declining inventory in the Midscale with Food and Beverage chain-scale category. It should be noted during the third quarter of 2007, the greatest percent increase in pipeline construction activity occurred in the Luxury segment. However, given the time required to build these elaborate facilities, the impact of the new competition will not be felt until 2009 and beyond.
ADR Drives Revenue
Across the board, all segments of the lodging industry are forecast to experience flat or declining occupancy levels in 2008. Luxury hotels are forecast to achieve the greatest gains in ADR (6.6 percent), followed by properties in the Midscale without Food and Beverage (6.0 percent) and Upscale (5.5 percent) segments. Meanwhile, hotels in the Midscale with Food and Beverage (3.8 percent) and Economy segments (2.9 percent) are expected to lag in ADR growth.
“The ability to increase room rates will drive revenue growth for the year,” Woodworth said. “Luxury hotels enjoy a loyal base of guests that are less affected by the recent dour economic news. The Midscale without Food and Beverage and Upscale chain-scales include several select-service brands that are very popular among both business and leisure travelers.”
City Performance Varies
Geographically, all regions of the nation are forecast to experience growth in RevPAR in 2008. “However, as we always caution our clients, individual cities have their own cyclical behavior,” Woodworth added.
Hotel managers in Austin and Salt Lake City are expected to enjoy ADR;(Average daily rate) growth rates in excess of 7.5 percent in 2008, due to a relatively limited amount of new supply coming on-line. This strong growth in ADR should result in nation leading RevPAR;(Revenue per available room) gains above 8.0 percent.
At the other end of the spectrum, hotels in the Long Island, Washington DC, and Sacramento markets will struggle to grow their revenue in 2008 because of supply growth in excess of 5.0 percent. Hotel managers in Fort Worth and San Antonio will face the greatest increases in new competition. The lodging inventory in these markets is projected to grow in excess of 9.0 percent, thus resulting in a forecast decline in RevPAR for Fort Worth (-2.2 percent) and a slight 1.4 percent gain for properties in San Antonio.
Buoyed by inbound international travelers taking advantage of favorable currency exchange rates, New York should continue to enjoy particularly high levels of occupancy, ADR, and RevPAR. Like the rest of the nation, however, New York metro area hotels are forecast to experience a drop in occupancy (-1.4 percent), with the overall occupancy rate remaining above 80.0 percent. The decline is attributable to record-breaking levels of new hotel construction activity.
“The pipeline for new hotel projects in Manhattan is unprecedented, but so are the high levels of occupancy and ADR,” says John Fox, senior vice president in the New York office of PKF Consulting. “Neighborhoods are opening up in Manhattan where developers never thought of building before.” For 2008, New York metro area hotels are forecast to achieve an annual occupancy of 82.7 percent, with an average daily room rate of $299.38.
Cost Concerns
PKF-HR is forecasting a healthy 8.5 percent increase in the bottom line of the average U.S. hotel in 2008. Of concern for hoteliers is the rise in the cost of operations. While total revenues are forecast to increase by 5.3 percent, hotel operating costs are projected to rise 4.0 percent, nearly double the expected pace of inflation. Labor-related costs make up 45 percent of operating expenses at the typical hotel. Low national unemployment rates put pressure on wage rates and make it difficult for hotel managers to find staff. Further, PKF-HR has observed an increase in expenses that management has less control over, including employee benefits, utilities, property taxes, and insurance...
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RFPCME or anyone else who follows Hill, Have you heard what the big announcement is suppose to be with Hill Air Force Base today? It was mentioned on the news last night. 
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