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Philadelphia's Center City Hotels Reporting a Fruitful Summer, Occupancy
 from Memorial Day through Much of the Summer 76%, Up from
 72% in Summer 2009

By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News

September  09, 2010 --Cleopatra deserves some credit. The still-popular queen of ancient Egypt -- along with the Romans and a notable French Impressionist -- helped Center City hotels to a fruitful summer, with gains in occupancy and revenue per available room despite a record number of excessively hot days.

Occupancy from Memorial Day through much of the summer was 76 percent, up from 72 percent in summer 2009, according to numbers released Wednesday by Smith Travel Research. And after opening 2010 about $10 lower than last year's level, the Center City hotels' average daily rate for July was $137.42, down only about $2 from July 2009. (Results for August, and the full summer, are not yet available.)

"We are seeing a higher occupancy rate for all hotels, and the average daily rate is slowly coming back," said Ed Grose, executive director of the Greater Philadelphia Hotel Association. "We are hoping this trend continues for the rest of the year.

"While we are not back to previous levels, the numbers from the summer are great news, especially when you consider the new hotels that have come into the city," Grose said.

The newcomers are the 230-room Palomar, which made its debut in October, and the 202-room Le Meridien, which opened in May. The two upscale hotels raised Center City's total room inventory 4 percent, to 11,155.

Nick Gregory, general manager of the Palomar, at 117 S. 17th St., said his hotel averaged 80 percent occupancy in July and August.

"We made our budget, but we got there through occupancy, not through [room] rate," Gregory said. "No one is making it on rate; everyone is going after occupancy."

The local numbers reflected national trends. For the week ending Aug. 28, U.S. hotel occupancy was up 10.6 percent, while the average daily rate was up 2.4 percent year over year, according to Smith Travel Research. The revenue generated from each room, or RevPAR, was up 13.2 percent.

"Strong weekly results continue to underscore our positive outlook for the hotel sector," said C. Patrick Scholes, lodging analyst with FBR Capital Markets & Co. Inc. "They definitely show the sector is on the upswing, and definitely driven by the return of the business traveler. But August results showed higher-than-expected strength with the leisure traveler, as well."

Among major U.S. urban markets, New York City led the pack in pricing power, he said, "whereas Philly is more concerned with filling its hotel rooms and the pricing will come later, assuming that demand continues to improve."

Scholes added, "What we will start to see if the recovery continues, and if occupancy begins to max out, is hoteliers beginning to ratchet up pricing."

RevPAR for Center City hotels was up 2.6 percent for July and increased 7.6 percent for the region's five Pennsylvania counties.

Even with two new hotels, demand in Center City was running well ahead of last year's pace, up 10 percent year-to-date through July, as overall occupancy increased about 5.0 percent, according to Center City-based PKF Consulting, which tracks the regional hospitality industry.

The individual, or leisure, traveler was leading the recovery, with room nights up 15 percent. In June and July, leisure travelers accounted for 33 percent of room nights at Center City hotels.

Commercial-travel room nights were up 11 percent through July. Convention and group demand was up 7 percent.

"The prognosis for the Center City hotel market is brightening and certainly is the brightest in the last two years," said Peter Tyson, PKF Consulting vice president.

A succession of heat waves affected local tourism. Forty-five days registered 90 degrees or higher, up from just 13 last summer, according to the National Weather Service.

The Independence Visitor Center welcomed 666,000 visitors in June and July, down 9 percent compared with 2009, and the Liberty Bell Center greeted 606,000 visitors for the same period, about the same as a year ago.

Yet those same sticky days may explain the strong attendance numbers this summer for Center City museums and their blockbuster exhibits, including "Late Renoir" at the Philadelphia Museum of Art, up 46 percent in June and July; "Ancient Rome & America" at the National Constitution Center, up 15 percent in June and July, and "Cleopatra" at the Franklin Institute, up 11 percent in June and July, according to PKF Consulting.

"Philadelphia is truly a resilient city again this year," said Meryl Levitz, president and chief executive officer of the Greater Philadelphia Tourism Marketing Corp. "Despite a lower projection, demand ran ahead and leisure led the way. . . . It's an indiction of a good market mix."

The 150-room Omni Hotel, across from Independence National Park, benefited from the wide array of attractions, general manager A.J. Williams III said. His hotel was near 95 percent occupancy for July and August.

"We definitely saw more families this year than the two previous years," he said. "Some of them stayed closer to home," as opposed to flying to other destinations. Contact staff writer Suzette Parmley at 215-854-2594 or


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