Revenue up for Valley hotels - East Valley Tribune: Business

Revenue up for Valley hotels

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Posted: Thursday, April 26, 2007 6:30 am | Updated: 7:53 pm, Fri Oct 7, 2011.

Valley hotels fared well in March — typically the top tourism month of the year. Local hotels took in 8 percent more last month than in March 2006.

2007 lodging performance graphic

The rest of the country boasted a much lower 6 percent increase in room revenue from a year earlier.

Smith Travel just released its report of lodging industry performance for 2006.

While hotel occupancy — the percentage of available rooms actually booked — was just about the same as in March 2006, hoteliers were able to charge a lot more for those rooms.

“It’s all rate,” said Jan Freitag, director of Tennesseebased Smith Travel Research, national hotel industry trackers.

It’s the equilibrium every hotelier strives for.

“Anytime growth comes mostly from rate that’s great,” said Robert Brinton, executive director of the Mesa Convention & Visitors Bureau. “But we may be at a plateau. We had been able to grow rate and occupancy, but we may be nearing the point where rate is affecting occupancy.”

Brinton predicts growth will continue but at a lesser rate as the year progresses.

Chris Kenney, marketing director at Tempe Mission Palms Hotel, expressed similar sentiments.

“We came out of first quarter with occupancy flat compared with the previous year, but rates were up, and demand remained strong,” he said. “So far in April, our occupancy is up slightly (compared with April, 2006), but our rate is much closer to last year’s rate. Growth will continue, but can we sustain 8 percent or 9 percent?”

A potential indication growth has already slowed is that Valley hotel room revenue for the entire first quarter was up 9 percent, while March, the busiest — and usually priciest — month, was up 8 percent.

But Freitag said a month doesn’t make a trend. And Kenney said the Valley got a big boost from the Bowl Championship Series title game in January that likely skewed occupancy and average rate gains for the first month of the quarter.

Freitag said watch for the start of the summer travel season to spot a trend. While local hotel rates plunge during the summer months compared to winter numbers, the Valley has built up a significant summer tourism trade, Freitag said.

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