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Orlando-area Hotel Occupancy Rate Fell More than 10% in September 2008,
45.9% Compared with 51.1% in September 2007

By Sara K. Clarke, The Orlando Sentinel, Fla.McClatchy-Tribune Regional News

Oct. 22, 2008 - Fewer than half of Orlando's hotel rooms were filled in September, as the area's overall occupancy rate fell by more than 10 percent from a year earlier.

Occupancy in the Orlando market was 45.9 percent last month, compared with 51.1 percent in September 2007, according to data released Tuesday by Smith Travel Research.

A slumping economy and high gas prices combined with the threat of hurricanes to keep tourists away. Revenue per available room, a key industry measure, was down 11.9 percent from a year ago.

"That was probably one of the worst Septembers we've ever had," said Mark McHugh, president of Gatorland and chairman of the Orlando/Orange County Convention & Visitors Bureau. "As bad or worse than 9-11."

Local hospitality and tourism experts had warned that September, a historically slow month for Orlando, would be particularly bad this year. The visitors bureau told the Orange County Commission last month to expect at least six more months of year-over-year declines in hotel occupancy and tourist-tax collections because of the sour economy.

While September's numbers were disappointing, there were indications of a rebound in early October, said Danielle Courtenay, a spokeswoman for the visitors bureau. "One month is not a trend. We do expect that October will be better than September."

Orlando was just one of several large hotel markets that recorded double-digit percentage declines in occupancy rates -- Nashville, Tenn.; Virginia Beach, Va.; and the Tampa-St. Petersburg areas were among the others. But among the top 25 markets, only Tampa-St. Pete's occupancy rate was lower than Orlando's, said Duane Vinson, a Smith Travel Research vice president.

Orlando's west Kissimmee submarket, just south of Walt Disney World, was hit the hardest: Its occupancy rate was slashed by nearly a third in September, from 44.5 percent of all rooms a year earlier to 30.9 percent.

Through the first nine months of the year, Orlando's overall occupancy rate was down 2 percent compared with the same period in 2007, while the average room rate was up 1.6 percent.

"The year started out very strong," noted Scott Smith, a lodging instructor at the University of Central Florida's Rosen College of Hospitality Management, but now "it's really falling way behind."

One bright spot: Orlando outperformed the state as a whole, even though the Smith Travel survey does not include Walt Disney World hotels. Also, the local market's average room rate fell just 1.9 percent in September.

The area's convention industry could bring needed relief this month and during the first half of November. That's historically a strong time for group business, as companies try to squeeze in meetings before the holidays, UCF's Smith said. And unlike vacationers, business groups are not as quick to change their plans when the economy slows.

"They have a signed contract, and they're obligated to hold that meeting," he said.

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

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

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