Hotel Room Count Soars by 10% to 26,500 as Owners of New Assets Fear Rate War

CHARLOTTE-This area’s hospitality sector is in a feverish growth mode that is beginning to worry some owners and tourist planners. The supply of hotel rooms is at a record 26,500 or 10% above the 1999 count, and growing larger.

More than 4,500 new rooms are in the construction and permitting phase and another 1,200 rooms are still on the drawing boards, awaiting improved market conditions. Occupancy is at 60%, down from 64.6% in November 1999, according to Tennessee-based Smith Travel Research.

Owners of new assets fear a rate war by struggling properties which might start cutting rates to survive, notes Melvin Tennant, Charlotte Convention & Visitors Bureau president, in a published report. Tennant criticizes developers for not consulting the bureau on market conditions before starting new projects.