Expert Says Hotel Market May Be on Rebound

"If it was only a one-month phenomena, I'd be more cautious, but I think we're starting to see a recovery," Bob Benton, the author of the report, tells GlobeSt.com.

The average room rate in the first four months of the year, however, dropped to $80.77 from $82.66. Benton, principal of Robert S. Benton & Associates, says that slight dip in hotel room rates is not a concern. He says hotel owners during a recovery often will drop rates slightly to boost occupancies.

And in April, the average room rate was $81.75. Although it was still trailing the $82.99 average room rate in April 2003, it was the highest average room rate so far this year.

Last April, the average occupancy rate was the worst April in 14 years, with a 52.8% occupancy rate. This April, the average room rate was 57.3%. The occupancy rate was down from 60% in March, but it often drops in April because of fewer conventions. Downtown, however, saw its occupancy rate rise to 60.3% from 57.8% in April 2003. And Downtown's average room rate in April was the highest of the metro area at $121.03.

The highest overall occupancy rate could be found at hotels near the Denver International Airport, which boasted an average occupancy rate of 72%. The average room rate in April for those hotels was $76.06. In other markets, the best hotels along the southeast suburban corridor booked 59.5% of their room in April, with an average room rate of $84.41. Level II hotels along the southeast corridor had a 56.2% occupancy rate with an average room rate of only $48.89, the lowest of any submarket tracked by Benton.

The Boulder corridor had a 59% occupancy rate and an average room rate of $82.58. The US 36 corridor in northwest suburban Denver had an occupancy rate of 53.9% and an average room rate of $82.28. The Stapleton submarket had an average occupancy rate of 64.7% and an average room rate of $60.50.