News for the Hospitality Executive
Fear of Hurricanes Past; Central Florida's Overall Hotel
Occupancy Down 13.1% Compared with October 2005
|By Christopher Boyd, The Orlando Sentinel, Fla.McClatchy-Tribune
December 5, 2006 - The region's hotels recorded their steepest decline in occupancy so far this year in October, when fear of hurricanes past and a lack of hurricanes present may have combined to keep more rooms empty.
At the same time, Orange County's resort-tax collections started the county fiscal year in October with a 4.2 percent year-over-year decline, excluding revenue from a recently enacted tax increase.
Central Florida's overall hotel-occupancy rate was down 13.1 percent compared with October 2005, according to Smith Travel Research, which surveys the local market. The company found occupancy down in all price categories, with the biggest declines coming in mid-priced and economy hotels.
But, continuing a long-term trend, average room rates were up for all classes of hotels.
Jim Haughney, Orlando-area manager for Interstate Hotels & Resorts, said the absence of hurricanes this year actually had a negative effect on hotel's occupancy rates. He said many leisure and group travelers avoided Florida this year because it was forecast to be an active storm season -- and when no hurricanes occurred, the region didn't receive the post-storm spikes in October occupancy that followed the rash of August-September hurricanes in 2004 and 2005.
"During those two years, hurricanes created occupancy anomalies as rooms filled with government workers and evacuees," Haughney said. "This year, there were no government workers or evacuees."
Orange County, meanwhile, reported Monday that it collected $9.6 million in resort-tax revenue in October without the tax increase, which raised the rate from 5 percent to 6 percent. With the increase, it collected $11.6 million.
The resort tax is collected from short-term rentals, primarily hotel and motel rooms, and is primarily used to fund tourism-development efforts.
"This is not the way we might have liked to start our fiscal year; too early to say this one-month decline is a trend," county Comptroller Martha Haynie said.
Haughney, whose company has nine Central Florida hotels including the Crowne Plaza Orlando and the Doubletree Orlando at Universal Studios, said occupancy picked up in November and that bookings for December are strong.
But Abe Pizam, dean of the University of Central Florida's Rosen College of Hospitality Management, said a persistent decline in occupancy during the past year is worrisome.
"It's now obvious that we have a problem," Pizam said. "All the research that has been done lately shows a kind of fatigue with Florida in general and Central Florida in particular."
Pizam said tourism officials need to act soon to increase travel to the region.
"We have many new hotel rooms coming on board over the next two or three years," Pizam said. "Hoteliers will have no choice but to increase rates if they can't fill their rooms, which will make them less competitive."
Although occupancy rates were down overall, the hotel market exists as an aggregation of small submarkets. Alan Villaverde, general manager of the Peabody Orlando next to the Orange County Convention Center, said there were fewer conventions in October than in the same month in 2005.
"We are more tied to the convention center than other areas," Villaverde said. Like Haughney, he says November brought more business as concerns about hurricanes abated and gasoline prices fell.
In downtown Orlando, hotels cater largely to business travelers. Mark Moravec, general manager of the Orlando Downtown Marriott, said October was no disappointment.
"Downtown is a niche of its own," Moravec said. "There isn't a big supply of rooms here, and business this year was strong."
Christopher Boyd can be reached at email@example.com or 407-420-5723.
Copyright (c) 2006, The Orlando Sentinel, Fla.
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