The group projects that the occupancy rate in Dallas will be 55.7%, Houston 56.2% and Atlanta 57.1%. The overall occupancy rate projected for the top 20 markets is 63.8%. Denver ranks No. 19 in terms of the size, with an inventory of 37,020 rooms.
The report also notes that there have been seven sales in the metro area so far this year, for a total dollar volume of $18.3 million. That translates into a median cost of $28,500 per room.
However, the report goes on to say that the metro-area hotel market is at the bottom of the cycle. "A recovery, though, remains elusive," the report notes. "Recent data does suggest that summer time leisure travel is on the upswing. From July of 2003 to July of 2004, a 410-basis point increase in occupancy and average daily rate growth of 2.6% created a RevPAR increase of 6.7%. This is welcome news since the similar figures from wintertime did not suggest any improvement in tourism."
However, significant improvement, Marcus & Millichap notes, is somewhat restrained by construction, "which is essentially keeping pace with new demand. Construction will have the greatest impact on the upper-upscale category as new projects are concentrated in this class."
For example, the first JW Marriott in the state opened earlier this year in Cherry Creek North.
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