|By Melissa S. Monroe, San Antonio Express-News|
Knight Ridder/Tribune Business News
Nov. 24, 2004 - San Antonio's hotel industry will end this year with slight increases in occupancy, room rates and room revenues and expects even better results next year, compared with other Texas cities, a hotel consultant said Tuesday.
PKF Consulting in Houston, which surveyed 225 hotels in San Antonio, reported that the properties should end 2004 with hotel occupancy of 67 percent, compared with 66.9 percent last year.
The hotels had average daily rates of $83, up 1.2 percent compared with the prior year, and revenue per room was up 1.4 percent to $55.61.
John M. Keeling, PKF's senior vice president, said at a San Antonio Hotel & Lodging Association luncheon that what makes San Antonio so resilient is that it has a slow but steady growth in hotel rooms. Other cities, such as Houston and Austin, have added many rooms to their central business districts.
San Antonio's 225 hotels have 30,717 rooms this year. Downtown hotels will increase by 292 rooms next year to 11,220.
Keeling said that because a third of San Antonio's market is leisure travelers, followed by conventions and business travelers, it does well in economic challenges.
"San Antonio was least affected by the recession of any of the major Texas cities," he said. "But competition from group business is increasingly intense."
This competition, he said, stems from cities expanding convention centers and building large hotels, drawing groups away from San Antonio.
Although Texas convention hotels have fallen in occupancy from a high of 68.2 percent in 2000 to 61 percent expected next year, Keeling said, San Antonio still needs another convention center hotel.
Ray Halani of the Riverwalk Plaza Hotel and the San Antonio Hotel & Lodging Association said the city has a unique culture and character, compared with other destinations, but San Antonio should continue to be competitive. He said, for instance, that "though the Watermark hotel is ahead of its time, it puts San Antonio on the map."
Looking ahead, Keeling said, San Antonio still must improve on what it has to offer so visitors won't say "been there, done that." San Antonio hotels, he added, could improve on success for 2005 by investing in marketing, making capital improvements and avoiding payroll increases.
Next year, occupancy is expected to rise 1.5 percent to 68 percent and average hotel rates will increase $1 to $84. Revenue per room will increase to $57.12, up almost 3 percent.
Meanwhile, the San Antonio Convention & Visitors Bureau reports that local hotels had a decent September, with average hotel rates rising 3.1 percent to $81.02. Revenue per room was up 7.4 percent to $45.02.
Although September's occupancy was up 4.3 percent to 55.6 percent, the city had one of the lowest occupancy rates among other cities its competes with. September has historically been the third- or fourth-lowest occupancy month for the city.
Hotel tax collections were also up, 3.8 percent to more than $36 million, compared with the previous year.
The bureau is looking to 2005 with new staff and marketing plans. It recently named 20-year veteran Annette Latorre Conrad to director of sales, a key position, and filled the assistant executive director spot with 17-year-veteran Janis Schmees.
Next month, the bureau will unveil its new marketing plan, and in the near future the city will send out a request for proposals for a tourism strategic plan.
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