March 21, 2011--PORTLAND -- The number of hotel rooms in downtown Portland is set to increase again, bringing the number to nearly 1,000 -- almost double the number from a decade ago.

Despite the increase in inventory, hotels and motel occupancy rates in Portland and the metropolitan area have mostly held steady.

The latest addition will be the 122-room Hampton Inn opening in the next few months on the former Jordan's Meats plant site on Franklin Arterial.

Figures from Smith Travel Research, which conducts research for the Maine Innkeepers Association, show that Greater Portland occupancy rates have remained around 60 percent each year from 2000 to 2010, with a high of 64.2 percent in 2000 and a low of 54.5 percent in 2009, one of the worst years ever for tourism in Maine because of both the recession and especially poor weather.

But even the number from 2009 isn't outrageously low, said Greg Dugal, executive director of the association.

Hotel owners would consider occupancy rates of 55 percent to 60 percent acceptable, Dugal said, with the owner of a new hotel shooting for closer to the 60 percent figure, because new hotels are often more attractive to travelers.

Greater Portland's figures stack up fairly well compared to the national average, with STR reporting a 58.8 percent occupancy rate locally for 2010, compared to 57.6 percent nationally. As one would expect, the numbers are highly seasonal, with rates around or below 40 percent common each December and January and rates above 80 percent typical in August.

Barbara Whitten, executive director of the Greater Portland Convention and Visitors Bureau, said occupancy rates have remained fairly steady for about 20 years, despite added rooms.

According to STR, the number of rooms available in Greater Portland at the height of the summer season has risen from about 7,000 in 2000 to about 8,000 this year. Much of the growth in the past few years has been in downtown Portland, with the Portland Harbor Hotel opening in 2002, the Hilton Garden Hotel in 2003, the Residence Inn in 2009 and the Hampton Inn coming this summer.

In addition, the Eastland Park Hotel plans to convert about 50 long-term residential units to daily hotel rooms, although the new owners haven't yet said what their timetable is or determined how many rooms will be created by the change.

Whitten, whose success in attracting conventions plays a role in filling some of those rooms, said she'd like the addition of new rooms to slow to make the industry healthier in the region.

"You wonder, where's the breaking point?" Whitten said.

The travel industry seems to be rebounding, she said, which is good news for Maine hotel and motel owners. Maine can benefit, she said, if groups are planning to hold a convention after putting it off during the recession, but decide to keep costs low by picking a place to which attendees can drive, rather than having to fly.

Dugal said it's sometimes hard to pinpoint the reason for fluctuations in occupancy rates.

"It's a question of, is it the recession or is it the increase in properties?" he said, adding that it could be a combination of both, and sometimes other factors, like the weather, play a role.

He said average daily room rates were about $96 last year, not far off where they were in 2007, considered something of a high-water mark for the industry in Maine before the financial crisis in 2008, the recession and poor weather in 2009 and the slow recovery last year.

Dugal said hotels and motels in downtown Portland should be able to absorb the 122 additional rooms that are coming without a huge impact, but added, "any additional building would definitely have an impact, and it would not be a positive one."

Mark Woglom, one of the partners in the Hampton Inn project -- which will also includes 12 upscale condominiums and a Sebago Brewing Co. restaurant -- said he's not too concerned about the market for hotel rooms being saturated.

"We think Portland is a good market for the hotel," he said, adding that the occupancy rates "are what they are. We're not going to stop construction."

He said the partners moved fairly quickly on the project after acquiring the property little more than a year ago because they felt an obligation to Sebago Brewing, which was eager to move to the new building, and the quick sale of the condos suggested that the market remained strong.

Beyond the Hampton Inn, there aren't any major hotels in the pipeline for the region, Dugal said. Since it generally takes two to three years to build a hotel, it might be some time before a significant number of additional rooms are available in the Portland market, he said.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

[email protected]

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