|By Jefferson George, The Charlotte
Observer, N.C.McClatchy-Tribune Regional News
February 11, 2009 - With the recession forcing businesses and families to pull back on travel, the occupancy rate in Charlotte area hotels fell 8.3 percent in 2008 -- tumbling to its lowest level since 2004.
Beyond hotels' bottom line, the decline hurts revenue streams for Charlotte's lead tourism agency and major civic projects. Occupancy taxes help pay the construction debt for the NASCAR Hall of Fame, Time Warner Cable Arena and the Charlotte Convention Center.
From July through December -- the first half of the Charlotte government's fiscal year -- revenues from the 8 percent occupancy tax were about $15.3 million, down 11 percent from a year earlier.
Despite that drop, city finance officials said this morning that there was no danger to debt payments for the $195 million NASCAR Hall of Fame -- now under construction at Brevard and Stonewall streets -- or other projects. The city's financial models and debt payment schedules allow for economic downturns, they said, and it will take a few years of revenue declines before schedules have to be revised.
Area hotel occupancy was 60.2 percent last year, according to data provided by Smith Travel Research for the Charlotte Regional Visitors Authority. That's about the same as the U.S. rate and better than the N.C. rate of 56.3 percent, but neither the nation nor the state saw as big a dip in occupancy from 2007.
One reason for Charlotte's decline in bookings is the city's strong banking presence.
As Bank of America, Wachovia and other institutions thrived in recent years, business travelers flooded uptown hotels. Last year, though, the financial meltdown led those companies and others to curb business trips, leaving hotels scrambling for customers and offering discount rates in some cases.
While the Charlotte market's 2008 average daily rate was up nearly 5 percent to $86.92, sagging occupancy left the revenue per available room at $52.30, down almost 4 percent from last year. That decline was the first in Charlotte since 2003.
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