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Colorado Springs 2006 Hotel Occupancy Drops to 58.7% -
Lowest Level in 15 Years

By Sarah Colwell, The Gazette, Colorado Springs, Colo.McClatchy-Tribune Business News

Jan. 23, 2007 - Hotel occupancy rates in Colorado Springs in 2006 hit their lowest level in 15 years, according to a Rocky Mountain Lodging Report released Monday.

The 2006 occupancy rate was 58.7 percent. The last time the rate was this low was in 1991, at 57.5 percent.

"2006 was one of the weakest (years) I've seen in a long time," said Jackie Duff, president of the Pikes Peak Lodging Association and a 25-year hotel industry veteran in Colorado Springs.

Those numbers do not include occupancy rates for The Broadmoor hotel, The Cliff House and the Cheyenne Mountain Resort.

Duff speculated that rates declined because gas prices dissuaded people from visiting the Pikes Peak region in the summer and snowstorms kept people away late last year.

Also, the region hasn't had any new tourist attractions in recent years, putting it at a disadvantage in attracting overnight visitors, said Jim Cassidy, chief executive officer of Experience Colorado Springs at Pikes Peak, the local convention and visitors bureau.

During the first quarter of 2006, hotel occupancy rates rose over 2005, but by summer, typically the peak season for the hotel industry, occupancy fell. Some local hotel-industry experts said the State Games of America in Colorado Springs in 2005 inflated occupancy numbers. Still, occupancy rates in June, July and August 2006 were the lowest they have been this decade.

"This is about as low as it typically goes," said Bob Benton, with Robert S. Benton & Associates, Inc., which compiles the Rocky Mountain Lodging Report. "It seems as though the community needs to look at its marketing and its products to make sure the message is getting across and more people are coming to Colorado Springs."

Local hotels had a 35.5 percent occupancy rate in December, the report said. Although December is usually the slowest month for the local hotel market, 2006 was 1.8 percentage points below Dec. 2005's numbers and the slowest December yet this decade.

The several snowstorms that hit the Colorado Springs area in December may be to blame for the low occupancy rates, Duff said. Denver, which also had snowstorms in December, had a 51.3 percent occupancy average during that month.

Experience Colorado Springs at Pikes Peak, the local convention and visitors bureau, is funded by a tax on hotel rooms and auto rentals. The bureau's budget will not suffer because of the decreasing occupancy, said Jim Cassidy, the bureau's chief financial officer. Collections for the lodging and auto rental tax were up 1.78 percent through November.

Meanwhile, average hotel room rates in Colorado Springs were up in 2006 to $81.17 over $78.09 in 2005 and $73.04 in 2004. But room rates in Colorado Springs are more than $30 cheaper than the state average, a sign of a weak market, according to Benton.

In 2006, 352 hotel and motel rooms were added to the market with new properties, and another 120 rooms are coming this year, according to the tourism bureau.

"There is more and more development of new hotels, while there are still a lot of older products (hotels) in Colorado Springs, and that product doesn't seem to go away.," Benton said. "There are just a lot of older hotels that a lot of people are not typically staying at, and that tends to pull down occupancy."

Experience Colorado Springs at Pikes Peak is funded by a tax on hotel rooms and auto rentals. The bureau's budget will not suffer because of the decreasing occupancy, Cassidy said.

Collections for the lodging and auto-rental tax were up 1.78 percent through November.

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To see more of The Gazette, or to subscribe to the newspaper, go to http://www.gazette.com.

Copyright (c) 2007, The Gazette, Colorado Springs, Colo.

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