Occupancy Higher, But Hotel Industry Still Struggles

By Desiree Parker Friday, January 22, 2010

The Williamsburg Area Hotel Motel Association shared December’s Smith Travel lodging report for the Triangle, and though numbers are significantly higher, they likely don’t signify a turn-around for the struggling hotel industry.

For years, the hotel industry in the Historic Triangle has been suffering with abysmal occupancy rates. In December, occupancy went up 15 percent, from 25 percent in 2008 to 29.8 percent in 2009, according to the STR report. “The numbers are so low, a little increase seems like a lot,” says Hotel Motel Association President Chris Canavos.

The HMA aims for an occupancy rate of 58 percent, the number at which a hotel can make a reasonable profit. An increase of 15 percent still puts the industry average almost 30 percentage points under its goal.

The report shows just 2 out of 53 local hotels in this profitable range. There are 38 hotels operating with less than 40 percent occupancy (the STR numbers do not include Colonial Williamsburg properties or Great Wolf Lodge, and a few others).

Christmas Town at Busch Gardens helped a bit over the winter holiday season, Canavos says. “These kinds of events are great. We need more of them.”

The increase breaks down to about an additional 460 rooms per day, out of the approximately 294,000 rooms available over the course of a month.

Courtyard Marriott hosted a state Republican convention early in the month that drew about 600 people, and they also had a large group of soldiers (and some of their family members) staying from December through mid-January before deployment to Afghanistan. In fact, the hotel was overbooked during the convention and close to 100 soldiers had to stay elsewhere for a few days until the Republicans left. Marriott’s business accounts for some of the increase in occupancy.