The city’s booming economy continues to fuel good times for Austin’s hospitality industry, a new report by PKF Consulting shows.

Austin hotel occupancy has hit 79.9% for June, up 7.1 percentage points over the same period last year, reports John F. Keeling, senior vice president of PKF Consulting in Houston. “The Austin hotel market is very robust and very strong,” Keeling told “Every time we think it has peaked out, it surprises us. There is a lot of new inventory and yet the city seems to absorb it.” He attributes the high absorption rate to Austin’s growing business sector, mostly high-tech. “We refer to it as Silicon Gulch,” quips Keeling, who quickly adds “these new businesses are driving the hospitality sector.”

Keeling says the average daily room rate in June has increased 8.8%, to $92.11, with the CBD recording the highest rate at $132.12, up 8.4% over June 1999. Northwest Austin has experienced the largest percentage increase, 10.7% for the month. Of the utmost importance, revenue per available room – a key measure of economic success – has jumped 19.4% for the month to $73.59, with the Austin Central Business District again leading the way with a 30% surge to $112.49.

The CBD represents the biggest jump in occupancy for the month, recording 85.1%, with second-place ranking going to the southern sector and airport areas, which have increased by 6.4 percentage points. Keeling says the northern corridor has jumped 4.8 percentage points and the northwest, 4.4 percentage points.

In the first six months, Austin’s occupancy rate has risen 7.6 percentage points, to 77.6% with average daily room rates increasing 2.6% to $95.47. The only area showing a decline is the southern corridor and airport sector, where average daily rates have dipped 3% to $77.17. “There is a lot of new inventory, particularly limited service properties, in the south Austin area, and that tends to reduce room rates,” he says, adding that occupancy and rates will stabilize at some point. “You’ve got to believe the rising occupancy levels will have to taper off, but, every time I say so, the sector keeps proving me wrong,” says Keeling

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