Hotel Occupancy Rates Hit 14-Year Low

The last time it was lower was in 1989 at 55.5%, Benton tells GlobeSt.com. The occupancy rate in 2002 was 60.3%. The average room rate also dipped last year, falling to $84.79 from $86.05.

"Depressing, isn't it?" Benton says. "The first half of the year was down because of the war, then we saw some signs it was going to improve. But December was really terrible. Part of that can be attributed to the terrorist warnings. Commercial people weren't traveling."

At least not to the Denver area. "National surveys are starting to show that commercial travel is starting to pick up in many cities, but Denver is behind the curve," Benton says. In December, the average occupancy rate was 43%, compared with 45% in December 2002. The average room rate in December was $74.38, compared with $74.96 in December 2002.

The highest occupancy rates last month were in the hotels near the Denver International Airport, where 60.2% were occupied. The average room rate at hotels near DIA was $71.94.

The average occupancy rate downtown was 42.8%, slightly below the average for the entire market. But the average room rate downtown was $107.13, the only submarket to break $100.

The best hotels along the Southeast Suburban submarket booked an average occupancy rate of 45.7%, with an average room rate of $75.87. The Class B properties along the Southeast corridor, by contrast, had a 40.1% occupancy rate and an average room rate of $49.27.

In Boulder, the occupancy rate was 42.5% and the average room rate was $85.40. Hotels along the U.S. 36 corridor between Boulder and the Denver area showed an average occupancy rate of 40.5% and an average room rate of $76.01.