Sep. 25, 2003 - Although occupancy and room revenue have been flat for most U.S. hotels for the first half of this year, some analysts are predicting the second half of 2003 may show improvement.

Some Alamo City hotels already are seeing an uptick and hope the rest of this year won't be as bad as predicted because of a slowdown in conventions. But as the holidays approach, business traveling will slow down.

Smith Travel Research reported that national revenue per available room, a key benchmark of hotel industry health, rose 5.3 percent to $50.60 per room in the week ending Sept. 13. Occupancy jumped from 60 percent to 61.5 percent and the average hotel rate was up 2.6 percent to a little more than $82.

Locally, for that same time period, occupancy climbed from 56.6 percent to 61.3 percent, revenue per room was up 1.2 percent to $48.73, but average daily rates were down 6.6 percent to a little over $79.

San Antonio-based Source Strategies' quarterly Brand Report said any optimism earlier this year vanished once Texas hotels started showing declining percentages in occupancy and room revenue.

Only three Texas cities out of 27 in the Brand Report had room revenue gains of 3 percent or more in the second quarter.

Houston had a decline of 8.2 percent, Dallas declined 4.9 percent and San Antonio was down 3.1 percent.

Business travelers trading down to lower-priced hotels led to the declines. The Brand Report said revenues for lodging priced above $100 plummeted 18.5 percent.

John Keeling of PKF Consulting in Houston said San Antonio's market isn't as bad as people think.

"There's a lot of whining in San Antonio," Keeling said. "If you compare San Antonio's performance to any other market in the state, it's doing extremely well." This year, Keeling said, hasn't been a stellar hotel market like in 2002, but San Antonio seems to have an even-odd year pattern where it does better in even years.

The upscale Hyatt Regency Hill Country Resort and Spa, however, had the best summer of its 10-year history.

David Phillips, Hyatt's general manager, said the resort tried a new package that focused on attracting guests during the week. The package, which was priced at $179 per night, included complimentary breakfast, discounts and a $25 gas credit or Southwest Airlines mile credits.

With 500 rooms, the resort increased in room revenue about 45 percent from $4.6 million in the first quarter to $6.7 million in the second.

Despite showing improvements over the previous year, Phillips said, the rest of the year is short of expectations.

"I wish more people believed in this economic recovery that everybody is talking about," he said. "They are hesitant to buy into it."

Downtown properties like the Marriott Rivercenter and Riverwalk hotels also had a great summer.

Marketing director Steve Clanton of the Rivercenter and Riverwalk hotels said the Veterans of Foreign Wars convention in San Antonio and the Dallas Cowboys training camp helped to fill its 1,000 rooms. He said occupancy was in excess of 90 percent in July and August.

San Antonio Convention & Visitors Bureau director Melvin Tennant said the city's August hotel tax collections rose 10.7 percent compared with the previous August, which reflects increases in hotel occupancy and room nights booked in July.

Looking at the rest of this year, Tennant said, it will be softer, but it might be "tempered" by leisure travelers coming for the holidays.

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