And the newest numbers from Hendersonville, TN-based Smith Travel Research show the seven monitored submarkets are down 7.9% in March from 84.5% a year ago. But they're still ahead of the 64.8% national average by 13 points.

Walt Disney World's Lake Buena Vista area had the highest occupancy mark, 81%, down 9.4% from 89.4% previously. Tourist-clogged International Drive came in with 78.1%, down 7.9%. The Central Orlando submarket chimed in with 71.1%, down 4.2% from 74.2% a year ago.

While occupancy dips, the average daily rate of $99.19 is up 0.1% and is not declining. Robin L. Webb, vice president/managing broker, Arvida Realty Services Commercial Division in suburban Winter Park, sees that as a market positive.

"That's the good news, but caution is clearly the byword for the summer," Webb tells GlobeSt.com. "I do expect the market's occupancy level to soften by about three to four points, along with a relatively flat ADR for the period."

Webb, a hospitality industry specialist and a former hotel manager, sees two factors impacting the Central Florida market.

"It is reasonable to expect some softness in any market which expands at a 4% annual rate," he says. "Due to the availability of close-in land, albeit somewhat expensive, the growth in hotel rooms will continue throughout most of the next decade at a similar rate."

But he notes much of the expansion is geared towards the 2003 opening of the $750-million, fourth-phase exhibition space at the four million-sf (gross) Orange County Convention Center.

"Other supply expansion is simply the continuation of 30 years of hotel room development keeping up with the strength of Central Florida's attractions," Webb says. "Irrespective of the reason for building, it is a reality of the Orlando market condition."

The broker attributes some of the March occupancy decline this year to "American consumers reaching one of the lowest points in consumer confidence in almost a decade."

He says, "Although there is a commercial hotel guest base in Orlando, it is small relative to the overall inventory of hotel rooms in the market.

"While commercial traffic tends to hold its own in time of consumer confidence weakness, tourist travel is a discretionary spending decision by consumers, suggesting that more conservative potential vacationers opt to either not travel or take shorter trips."

Webb adds, "Even in light of the recovery of consumer confidence, family destinations across the nation are concerned that escalating gasoline prices, couple with continued growth of rooms supply may unfavorably impact occupancy rates for the summer ahead."

Instant Insights /

GlobeSt.com UPDATE: Hotel Occupancy Down 8% but Area Still Leads

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