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Utah Lodging Industry Reports Suggest an Upswing with Occupancy Levels Rising;
Caution Urged as Rates Remain Down

By Mike Gorrell, The Salt Lake TribuneMcClatchy-Tribune Regional News

Apr. 22, 2010--Two separate lodging industry reports suggest that key segment of Utah's economy is improving, but full recovery will be slow in coming.

Hotel occupancy rates statewide and in Salt Lake County last month exceeded levels achieved in March 2009, the first time since April 2008 that year-over-year increases were realized.

Similar results also emerged in a monthly report tracking the performance of lodging establishments in Western destination resort communities. That report, by the Denver-based Mountain Travel Research Program, found that occupancy rates last month in those posh places were 9.6 percent higher than March 2009.

March's improved showing was not as pronounced in conventional communities, with Salt Lake County hotels recording a 5.2 percent increase last month. Hotels statewide filled 2.9 percent more rooms on a nightly basis, according to the Rocky Mountain Lodging Report, which also is based in Denver.

Although both sets of results are "great positives," according to Utah Hotel & Lodging Association executive director Michael Johnson, he was reticent to get too excited at this point.

"There's some hesitancy to say it's because we've recovered," he said. "Occupancy has gone up, but hotels have held their rates low, knowing people are still looking for deals.

"People who used to take a couple of small trips a year or one big one put it off last year. They don't want to put it off again. Unlike last year, they

feel their jobs are secure and they're more comfortable, so they're traveling again -- but looking for deals."

Good snow in March and an earlier Easter also helped boost occupancy levels at resorts and southern Salt Lake Valley hotels, Johnson said.

"But there are still a lot of unemployed people who won't be traveling and still a lot of companies that have cut back on meetings. It's hard to know when those meetings will come back," he said.

"A lot of [hotel] properties are celebrating now, but it's because they don't have to cut their budgets even further. We have to put it into the context that there's a long way to go."

Ralf Garrison, author of the Mountain Travel Research Program's report, shared Johnson's perspective that it's too soon to rejoice too much about the latest figures.

March of 2009 was a bad month for the industry, so besting its results does not necessarily equate to March of 2010 being "good," he said. Still, it was the third consecutive month with year-over-year increases in actual occupancy for property management companies in 15 resort communities in Utah, Colorado, California and British Columbia.

"These figures indicate that a positive trend has now been established. It is now virtually certain that the winter season occupancies will exceed those of 2008-09," Garrison said. "But our enthusiasm remains cautious since occupancy rates remain fragile and overall revenues continue to lag behind those of last year."

His report projected occupancy this season will be 1.3 percent better than the previous winter. But in line with Johnson's concern, average nightly rates were down about 5 percent, indicative of consumers being rate conscious.

"Now that we are seeing the momentum shifting slowly to the more positive side of the spectrum -- in the ski industry, travel industry and the broader economy -- as a [mountain travel] industry we can be optimistic about carrying this strength into the summer season," said Garrison, who is now looking to the 2010-11 ski season with "cautious optimism."

Filling more rooms

Utah hotels posted higher occupancy rates last month than in March 2009, the first year-over-year increase in almost two years. Rooms filled nightly:

Salt Lake County -- 73 percent

Ogden -- 66 percent

St. George -- 63 percent

Davis County -- 61 percent

Utah County -- 59 percent

Cedar City -- 48 percent

Logan -- 46 percent

Mountain resorts -- 56 percent

Other parts of Utah -- 57 percent

Statewide -- 65 percent

Source: Rocky Mountain Lodging Report


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