For example, the last report for October showed an average 68% occupancy level at the end of month, following a disastrous plateau of 30% the weekend following the Sept. 11 terrorist attacks in New York and Washington, DC. Normal occupancy levels in the comparable period are 70% to 90%. The break-even point is 65%.

September occupancy averaged 44.6% versus an average 62.1% in August. Average daily room rates in the last week of October were in the $75 to $77 range. A year ago, the range was $85 to $88.

"Rates are not an issue in the Orlando market," Robin L. Webb, a former hotel manager and industry consultant for 30 years, tells GlobeSt.com. "Orlando has always been and continues to be one of the world's best travel values."

Webb is vice president/managing broker, Arvida Real Estate Services Commercial Division, Winter Park, FL.

He says that "while rates will continue to remain somewhat depressed through year-end and the first half of next year, market conditions, barring another barbaric attack, should return to normal by next summer."

Webb tells GlobeSt.com "the impact upon rates and occupancy will be more a result of the declaration of recession than terrorism." He says the current round of rate slashing came "from a sense of panic following the terrorist attacks of Sept. 11, due to the immediate cessation of reservations."

The broker/consultant says "the short-time rate slashing and dive in occupancy were an immediate reaction to the withdrawal of discretionary spending on travel."

Webb says Central Florida already is "beginning to see a return to something which resembles normalcy with a pretty good Thanksgiving holiday behind it and a similar Christmas holiday season on the way."

He says "the American vacationer exhibited last week that he and she will travel for a vacation, even if he or she must do it by automobile."

Meanwhile, investment sharks are circling financially troubled inns, waiting to reel in a big one at a bargain price.

"The market has shifted to a buyers' market and wise money is beginning to enter the lodging investment arena across Central Florida," Webb tells GlobeSt.com. "Bargain hunters are plentiful in the market today."

Room rate discounts of 50% to 70% are being offered by a mix of low, mid and high-priced hotels. The price wars come as Walt Disney World considers shuttering more of its 22,000 rooms at 18 hotels it operates at its 30,000-acre Lake Buena Vista empire.

Disney closed the 1,500-room French Quarter Hotel in its Port Orleans Resort section Nov. 2 after undisclosed occupancy levels reached a non-profitable level. Now another segment of the 3,056-room Port Orleans area is due to be closed shortly until the economy improves, Disney officials confirm.

Disney previously shelved the scheduled March opening of the two-building, $460 million, 5,760-room Pop Century Resort next to the 350-acre Wide World of Sports stadium.

Instant Insights /

GlobeSt.com UPDATE: Deep Discounting Continues but Hotel Broker Predicts Market Will Stabilize

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