Hotel Market Flat Across Submarkets

Year-to-date, the occupancy rate is 57.2%, compared with 55% in the first five months of 2003. However, in April the average room rate fell to $83.71 from $85.94 in May 2003. And year-to-date, the average room rate is $81.40, compared with $83.38 per night through May 2003.

However, according to Bob Benton, publisher of the report, the slight drop in room rates isn't an issue as the market struggles to recover, as hotel owners will drop rates a bit to increase occupancy. The report shows that the highest room rates, as always, were in Downtown. Of the 159,995 room rate available downtown, 104,093 were occupied, or 65.1% of them, at an average room rate of $112.47.

While Downtown always leads the pack in room rates, it is often also the only submarket to boast an average room of more than $100 per night. But in May, Boulder had the second highest room rates at $104.62. Boulder's occupancy rate stood at 60.7%, with 31,083 of the 51,181 available room nights occupied.

The highest occupancy rate is found in the Denver International Airport submarket. There, 40,397 of the 57,902 available room nights were occupied in May, giving it an occupancy rate of 69.8%. Hotels in the DIA corridor had an average room rate of $75.77.

The combined southeast market, with 261,906 room nights available--the largest concentration of hotel rooms in the metro area, had an average occupancy rate of 55.8%, with 146,091 of the rooms occupied in May. The average room rate for the entire south market was 72.24%, although there was a wide range in hotel costs.

What Benton describes as Level I hotel rooms—class-A properties--the occupancy rate was 60.7% and the average room rate was $82.73. There are 108,652 Level I rooms available, and 65,945 of them were occupied in May. The Level II hotels sported an average room rate of $52.50, an average occupancy rate of 54.2%. Of those 57,071 available hotel rooms, 25,521 were occupied.