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In the Last Year, Five New Hotels Have Opened in Yuma, Arizona, Adding 500 Rooms;
Occupancy  Rate for February, 2008 at 80% Compared to Previous Year 96%

By Joyce Lobeck, The Sun, Yuma, Ariz.McClatchy-Tribune Regional News

Mar. 30--HOTELS ARE POPPING UP EVERYWHERE -- raising the question of just how many more are needed before there are too many.

Yuma isn't there yet, say those in the hotel business. But now might not be a good time to be planning a new one.

In the last year, five new hotels have opened in the Yuma area, adding nearly 500 rooms to the inventory of beds where travelers can rest their weary heads. One more hotel is nearing completion, and construction is under way on an additional five. Another two are in the planning stages and several more are being talked about.

Spreading guests over more hotels has driven down occupancy rates, hoteliers say, but they're still filling a "respectable" number of rooms.

"Occupancy rates aren't dire," said Jeanine Rhea, manager of the Hilton Hampton Inn and president of the Yuma Hotel Association. "But none of us are meeting our budgets. We're not doing as well as last year."

According to a survey of 22 hotels, the average occupancy rate for February was a little over 80 percent, Rhea said. That's well above the industry-wide occupancy rate of about 70 percent. However, it's down a significant 16 percent from this time last year, when the average occupancy rate in Yuma was 96 percent and there were many nights when a vacancy could not be found in the city.

And Rhea and other hotel managers are wary of how they'll do this summer, not so much because hotels are over built but as a result of the economy.

Occupancy rates tend to drop off a little in the summer, said Paul Rogers, who has 340 rooms to fill every evening as manager of Holiday Inn and the recently opened Holiday Inn Express and Candlewood Suites.

What has him and other local hoteliers concerned is whether high gas prices and the slumping economy will discourage traveling.

He said surveys indicate people may be less apt to hit the highway this summer. With the higher cost of gas, food and utility bills, "people just can't afford to travel anymore. I think we'll feel a pinch this summer."

That concern has the Yuma Visitors Bureau working hard on events to lure visitors to the area over the summer months, said Bob Ingram, executive director.

"As we head into summer, everyone expects leisure travel to wane," he said. "People tend to pass through in the summer. They're not staying, at least in hotels. We expect it to be worse this summer."

But then, leisure travel is only a small part of the business that fills their rooms, hoteliers say.

It's government-related travelers, whether military or government contractors, that book the bulk of their rooms -- often for months at a time. That goes for many of the long-established hotels as well as the new ones.

Most of her business is government related, said Bonnie Rhodes, manager of the 22-year-old Clarion Hotel at 2600 S. 4th Ave.

It also helps a great deal to be a branded hotel on the corporate reservation system, she said. The hotel also has a loyal clientele, and the growing community is helping, too, to keep up her occupancy levels.

Rhea said by far the bulk of her business has been government related, but that seems to have declined a little -- perhaps in part because those contractors are settling in at the new extended-stay hotels, but she also thinks government travel is down right now.

At any rate, occupancy at Hampton is down almost 6 percent so far this year, but still leaving with her with an average rate of 88 percent.

That's good news for travelers, she said. In the last couple of years, hotels were often booked three weeks in advance and there were many nights when no room could be found in the city for a walk-in guest. That's not happening very often anymore, she said.

As the manager of two new hotels, Rogers said there have been some "pleasant surprises. "They've both been very successful. Occupancy at the Holiday Inn Express has been 75 percent. That's really a great feat for the first year."

While he's happy with the performance of the three hotels he manages, Rogers does worry about the weekends, when the business traveler goes home. "Friday mornings there's a huge exodus. It's Friday and Saturday nights we're working on."

As more hotels come on line, hoteliers will have to be more creative in ensuring rooms aren't empty on those nights, he said. After all, he said, there's only so many major events, such as Midnight at the Oasis and dove hunting season, to attract people to Yuma and in need of a hotel room.

He's working on attracting such events as weddings and reunions. As more hotels open, he thinks hoteliers will be looking for other ways to fill rooms, such as converting to another type of use.

Lorraine Cruz, sales and marketing director for the Hilton Garden Inn and Riverfront Conference Center now under construction in downtown Yuma, is optimistic that demand will keep up with the hotel room supply.

Cruz said the hotel industry in Yuma "definitely isn't overbuilt. We have groups reschedule meetings because the city is sold out, and military training is arranged around hotel availability."

She's already booking major conventions that will fill hundreds of rooms around the city. "The (Hilton Garden Inn) hotel won't take away business from the other hotels but bring it to them," she said. "We'll need help from everyone in Yuma to house people. The easier it is to accommodate groups, the easier it will be to book events."

She's also a firm believer that the proposed multi-events arena would be a big boost for hotel business, bringing people to Yuma from around the region to see concerts and other events.

-- Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853.

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

Copyright (c) 2008, The Sun, Yuma, Ariz.

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