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Hotel Occupancy in Kansas City Down Sharply in September -
Down Only Slightly for the Year 2008

By Rick Alm, The Kansas City Star, Mo.McClatchy-Tribune Regional News

Oct. 28, 2008 - Hotel occupancy in Kansas City was down sharply in September and is down slightly for the year.

The September stumble may be the first crack in the local hotel industry's earlier resilience to a national lodging downturn.

According to Smith Travel Research data released Monday by the Kansas City Convention and Visitors Association, metrowide hotel occupancy fell 7.1 percentage points last month to 59.3 percent. The national average last month was down 5.9 points to 60.6 percent.

Through the first nine months of 2008, occupancy of the metro area's estimated 30,000 rooms was down 1 percentage point from 2007 to 59.6 percent, while the national average was down 3 points to 62.9 percent.

Kansas City also is outperforming year-to-date occupancy rate growth in several competitor cities, including Denver, Indianapolis, St. Louis, Minneapolis and Nashville.

Association spokesman Alan Carr said airport hotels continue to be a local bright spot, with demand and occupancy up 4.6 percent in September.

But during September, said Carr, "Kansas City began to see the impact of the nationwide economic downturn" as demand and occupancy rates fell further than those of most competitors.

Nationally the outlook isn't good.

Smith Travel recently revised -- downward -- its occupancy forecasts for the balance of 2008 and 2009, with 3 percent declines now projected both years. If that holds, overall U.S. occupancy could fall next year to 59.1 percent, the industry's lowest level in five years.

The bad news for business and leisure travelers is Smith Travel's companion forecast for rising room rates in the coming year.

Unlike the last downturn, which triggered room rate cuts, Smith Travel president Mark Lomanno said analysts now forecast a 1 percent increase in the national average daily rate in 2009 to $108.53. That's up from $107.44 projected for this year, and it would mark an all-time high.

On Thursday, the national Travel Industry Association is scheduled to disclose its leisure and business travel outlook for 2008 and beyond.

To reach Rick Alm, call 816-234-4785 or send e-mail to ralm@kcstar.com.

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To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com.

Copyright (c) 2008, The Kansas City Star, Mo.

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