Austin's Hotel Performance Comes With Caveat

AUSTIN-Yes, Austin’s hotel and motel figures were much better in October in comparison to October 2001. Overall, occupancy rose 1.3%, the average daily room rate rose 3.5% and RevPAR rose 5.8%, according to PKF Consulting, which tracks the hospitality market.

But Liz Reyna, executive director of the Austin Hotel-Motel Association, doesn’t see much reason to celebrate in those numbers. The October 2002 figures do, after all, compare to the first month after the Sept. 11 terror attacks when business travel virtually screeched to a halt and room reservations were canceled en masse. “There would be a natural increase from last year,” she tells GlobeSt.com. “Overall this year, we’ll still be down.”

Reyna says PKF predicts that the Austin market will end the year at 58% occupancy. “They’re only predicting a slight increase over that for 2003.”

“Unfortunately, our supply has exceeded our demand,” she says. The 800-room Hilton Austin Hotel is scheduled to open in January 2004, but overall not too many more rooms are being added. “The supply should flat line a little and let demand catch up,” she says.

Hotels in Austin’s CBD had the biggest gains in October. Occupancy increased 10.7% from 64.5% to 75.2% and the average daily room rate inched up 1.4%. RevPAR, which measures revenue per available room, jumped 18.1% from $83.86 to $99.06.

Hotel-motel performance in the city’s other submarkets, which are more dependent on business travel, showed little, if any, improvement over 2001. The north submarket’s occupancy rate dropped 5.2% to 52.7%; its average room rate increased 3.6%, but RevPAR fell 5.7%. The northwest submarket eked out a slight occupancy gain of 0.9% to 62.8%, but the average room rate fell 5.9% and RevPAR was down 4.5%. In the south submarket, which includes Austin-Bergstrom International Airport, results were down across the board. Occupancy was off 2.7% to 58.2%; average room rate dropped 3.5% to $68.43; and RevPAR fell 7.8% to $39.85.