Los Angeles-based PKF Consulting reports Greater Phoenix's occupancy from January to October was 69.9% at hotels with average daily room rates of $200 or higher, a drop of 8.6% from the year before. RevPAR suffered too, dropping 5.1% to $196.51 per day. In the $150 to $200 range, hotel occupancy was 72.2%, a drop of 3.8% from the same period in 2007. The mid-price category's RevPAR was $120.69, dipping 0.6% from the same period a year before. Seeing smaller drops in occupancy were hotels with ADRs of $85 and $100, which had occupancy of 66%, down 2.9% in the past year. The category's RevPAR increased modestly to $61.40 this year versus $61.66 in 2007.

Jeffrey Cunningham, senior associate in CB Richard Ellis' Phoenix office, says the statistics show all hotel categories in all locations are seeing negative growth, but the high-end product seems to be getting the worst of it and select-service, or limited-service, is more or less holding its own. "Historically, you used to think that the higher-end product was sort of immune to this type of thing," he tells GlobeSt.com. "What you were seeing was that the luxury hotels weren't struggling quite as much. It was the upscale, limited-service product that struggled."

Cunningham says the figures suggest the track record of business travelers is continuing to hold up, but people who had been paying $200 per night per room are cutting back. "They'll stay in rooms that are $150 a night," he says.

Mark Snyder, president of Snyder Nationwide Real Estate Inc. in Scottsdale, AZ, adds that the strong-brand hotels, like those under the Hilton Hotel Corp. and Marriott International Inc. flags, are doing better in the mid-range category primarily because of business travelers. "A lot of these folks prefer the larger brand because of their rewards program," Snyder tells GlobeSt.com. "They can collect the points, and use them later on."

Snyder also points out that, with more entrepreneurs on the road, less expensive categories are preferred. With business owners paying for rooms themselves, they're less likely to go for the supreme luxury hotel, but still want a comfortable place to stay.

Another category that took a beating was the economy motel and hotel. Among hotel rooms charging less than $55 per night, occupancy between January and August was 65.3%, a 9.5% decline from 72.24% in 2007. The category's RevPAR didn't fare so well either: $30.15, down from $33.32 from 2007.

"With that category, you're talking about older motels and transient housing rather than the true hotels," Cunningham explains. "Not a lot of people are moving into the Phoenix area for jobs these days and staying in these places, which is why we're likely seeing the decline."