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HOUSTON-Hosting the Super Bowl and the All-Star Game had a positive impact on the Bayou City’s hotel market in 2004. Next year–without such big sporting events–the hotel market will not post any large occupancy or room rates increases unless the moratorium on corporate travels ends, says John Keeling, a SVP in PKF Consulting’s local office.

“Next year will be kind of a boring year, but it could be exciting if corporate travels picks up,” Keeling tells GlobeSt.com. He says that 2005 will look a lot like 2004 from an occupancy and room rate standpoint, however. “We’ll do a bit better because of improving economic conditions, but with no sporting events, it will be a wash.”

Hotel occupancy for the metro market for the 10 months ended October 2004 was 62.8%, a 1.6% increase over the 61.2% for the same period last year, according to PKF Consulting’s most recent report. Moreover, the Houston market posted a hefty increase in both RevPAR and average daily rates. RevPAR was $57.03 for the 10 months ended October 2004, an 8.8% increase over the $52.39 posted for the same periodlast year. The average daily room rate was $90.78, a 6% increase over the $85.61 posted for the same period last year, according to PKF.

Keeling points out that the Bayou City has managed to keep its occupancy and room rates up despite the increase in inventory. Over the past 24 months, the city’s hotel inventory has almost doubled, from 2,814 rooms at the end of 2002 to 5,292 rooms currently, according to Keeling. “Houston is doing okay. It’s certainly not in distress,” Keeling says.

Moreover, Keeling is hoping that the increase in corporate demand that Houston has experienced toward the latter part of this year will continue and grow into 2005. “We could see a very rapid increase in occupancy if we could come out of the blocks very strong,” he says. Instead of 63% occupancy that we’re forecasting, we could have 68%. The variable is corporate demand.”

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