News for the Hospitality Executive
|By George Schwarz, Amarillo Globe-News, Texas
Knight Ridder/Tribune Business News
Jan. 8, 2004 - Although the occupancy rate for Amarillo's lodging industry held up between 2001 and 2002, preliminary data for 2003 shows that room use has taken a hit.
With between 400 and 500 additional rooms coming on line soon, occupancies may dip further.
According to data from Source Strategies Inc., a San Antonio-based consulting firm, the occupancy for Amarillo's hostelries up-ticked 1.7 percentage points between 2001 and 2002, but for the first three quarters of 2003, occupancy fell from 67.7 percent to 64 percent.
The same data show that for Texas overall, occupancies fell for the 2001-2003 period and remained stable for the 2002-2003 third quarter comparisons.
"The flatness probably still represents some hesitancy to travel," said Eric Miller, communications director for the Amarillo Convention and Visitor Council.
Some larger towns and cities have seen more drastic drops, from 5 percent to 15 percent in occupancy. Convention planning is still impacted by the effects of war and terrorism.
With air travel down, Amarillo benefits from being on Interstate 40, Miller said.
"People are driving more; that helps us, Miller said. "Everything that we've been hearing, if you have a flat occupancy rate over the past few years, you're doing good."
Miller said the 400 to 500 new rooms coming online will represent a gain of about 10 percent over current inventory. Most of those are smaller properties with limited service and, bowing to consumer taste, suite properties.
Neither Miller nor Scott Allison, director of sales at the Ambassador Hotel, would predict the effect of the increased room count.
Amarillo's hotel-motel use peaks in the months of May through October, according to Amarillo Convention and Visitor Council data.
"The sad truth is one new room is going to affect somebody, somewhere," Allison said.
The properties being built west of town are limited-service properties and their goal is to cater to the transient business that travels I-40. No matter what brand names they are, new or old, they're going to have more than I-40 business because the Amarillo market is saturated.
Dipak Patel, who is building the new Country Inn and Suites slated to open in May, said he would neither predict occupancy rates nor talk about other businesses.
"I don't want to talk about other businesses but my business is good," he said, adding he used to own the EconoLodge and that business is still doing well.
Patel said he started in this country with $10 in his pocket and caught a break from the Route 66 Association. Since then, he feels an obligation to Route 66.
The Country Inn model, with wooden floors and a country motif, fits the antique-row feel of the Mother Road.
It's also a way to give back to a country that gave him such an opportunity, he said.
In some ways, the lodging business is like any other, Allison said.
If hoteliers plan and have a strategy, they will be successful. If they don't or aren't willing to change, business will pass them by, he said.
"In terms of the future, we can't control how many (rooms) are built in Amarillo," Allison said. "All we can do is strategize and come up with a game plan to keep our owners and management company profitable and happy.
"If they don't do that, they will fail."
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(c) 2004, Amarillo Globe-News, Texas. Distributed by Knight Ridder/Tribune Business News.