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Orlando-Area Hotel Occupancy Slips Below 70%
to Lowest Rate on Record for Month of July

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

Aug. 25, 2009--The sweet spot of Orlando's summer tourism season soured last month for the region's hotels, as they logged their worst July in more than two decades.

Orlando-area hotels were 68.2 percent full on average in July -- a month in which summer vacationers routinely push the market's occupancy rate beyond 75 percent.

Last month's occupancy was down 6.5percent from July 2008 and was the first July rate to slip below 70 percent since Smith Travel Research started keeping track of the local market in 1987.

"Obviously the occupancy of below 70percent for the month of July is a reflection of the current state of the economy, the fear of job losses, and the issues relating to the spring 2009 'blacklisting' issue," said Richard Maladecki, president of the Central Florida Hotel & Lodging Association.

It's a trend that's likely to continue for the "foreseeable future," Maladecki said, though as the summer season comes to a close and the historically slow fall season looms, many hoteliers are holding out hope for a strong holiday season in December.

John Parkinson is one general manager who hopes the market turns the corner by the end of the year.

"We had a strong summer, stronger than we might have expected based on the global economic trends," said Parkinson, who run the Embassy Suites International Drive. "We're optimistic."

Local hotels generally continued to rely on discounts to fill rooms: The average daily rate in July was $82.79, or 11.9 percent lower than the average price a year ago, according to the Smith Travel survey, which does not include Walt Disney World hotels. The combination of falling occupancy and lower prices caused revenue per available room, a key industry measure, to fall 17.6 percent from a year earlier.

The pain was spread evenly throughout all industry segments, from budget motels to luxury hotels. Geographically, the hardest-hit submarket was west Kissimmee, on Disney World's south flank, where occupancy fell 12.5 percent despite rate cuts averaging 11.1 percent. July's steepest room discounts -- 15.8 percent -- were recorded in the Lake Buena Vista area, on Disney's northeast side.

Greg Hauenstein, area managing director of the Buena Vista Palace Hotel & Spa, said an increase in leisure travelers partially offset a sharp drop in group business at his hotel. Still, occupancy at the BVP is down about 15 percent from last year.

"The summer has just not panned out very well," Hauenstein said.

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) 2009, The Orlando Sentinel, Fla.

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