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Orlando Area Hotels Suffer Fifth Consecutive Month
 of Year-over-year Declines for Occupancy
By Sara K. Clarke, The Orlando Sentinel, Fla.McClatchy-Tribune Regional News

Nov. 25, 2008 --Orlando-area hotels were less full in October than a year earlier -- the fifth consecutive month of year-over-year declines for the local lodging market.

The average hotel in the Orlando market was 61.9 percent full last month, compared with 65.3 percent in October 2007, according to Smith Travel Research, for a decline of 5.1 percent. Revenue per available room -- a key industry measure -- was also down 5.1 percent from a year ago.

Despite the lower occupancy rate, the average room price remained steady, a sign that hoteliers are resisting the temptation to mark down their properties.

"The hoteliers, as well as the attractions, are going to try to maintain the integrity of their price schedule," said Richard Maladecki, president of the Central Florida Hotel & Lodging Association. "I think we're going from a discounting culture to an enhancement culture."

That could mean more free breakfasts and other incentives that add value to a hotel stay -- and don't sacrifice the price.

Orlando hotels went through a period in the 1990s when discounts eroded the area's average room, or "rack," rate, which led visitors to expect lower prices as the norm, said Paul Rompf, an associate professor in the University of Central Florida's Rosen School of Hospitality Management.

"You want to be careful that you don't get the customer accustomed to that," Rompf said. "To increase that rack rate took them years."

Still, room rates were dropping fast in October in certain segments of the business, especially economy and budget hotels.

West Kissimmee -- an area known for its budget-oriented properties -- was a particular weak spot in October. The hotels at the southern doorstep of Walt Disney World reported an 18.6 percent drop in their combined occupancy rate compared with October 2007, even as their average room rate fell by 3 percent.

Through the first 10 months of the year, the Orlando market's overall occupancy rate was down 2.3 percent compared with the same period in 2007, while the average room rate was up 1.5 percent. The survey -- which does not include Walt Disney World hotels -- found that Orlando continued to outpace Florida's hotel market as a whole, which logged an October occupancy rate of 55.8 percent.

Maladecki said this year's Thanksgiving bookings have been slower than last year's. He said the industry is hoping for a December turnaround fueled by the year-end holidays. Gas prices, which recently dropped to levels not seen in several years, might persuade more tourists to take a trip.

"Obviously, that's only going to work toward our destination," Maladecki said of the drop in the cost of fuel.

Sara K. Clarke can be reached at skclarke@orlandosentinel.com or 407-420-5664.

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To see more of The Orlando Sentinel or to subscribe to the newspaper, go to http://www.OrlandoSentinel.com.

Copyright (c) 2008, The Orlando Sentinel, Fla.

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