Slowing Hotel Market Looking to Atlantic Station, World Congress Center for New Sizzle

ATLANTA-Following a sizzling four years, hoteliers can look forward to moderate growth rates in occupancy and room rates in 2001, Ernst & Young’s national lodging forecast predicts. For the last two years, the average occupancy rate in the metro area has been 65%. In 2001, the rate will inch up, possibly to 66%.

That’s still better than the national occupancy rates which averaged 63.2% in 1999 and 63.9% in 2000. The study anticipates national rates will dip this year to 63.7%. Factors affecting the Atlanta market include a softening of the construction market and metro-wide layoffs among area employers such as Lockheed Martin, Coca-Cola, BellSouth and CNN.

On the plus side, the tight labor market is absorbing jobs rapidly, convention business is up and there are some major changes afoot that will increase the demand for hotel space in the near-term. Among them are the redevelopment of the 140-acre Atlantic Station (the former Atlantic Steel site) in Midtown and the $220 million, 450,000-sf expansion of the Georgia World Congress Center Downtown.