Hotels Make Modest Gains in Fall, Look to Summer

Hotels Make Modest Gains in Fall, Look to Summer

Thursday, December 30, 2010

Hotel occupancy held at close to the same low rates as last year over the fall months, but hoteliers made a bit more money thanks to a bump in rates.

In September through November, Williamsburg-area hotels had occupancy rates between 30 and 40 percent, significantly less than neighbors Virginia Beach and Newport News, but revenues were slightly higher compared to last year. Williamsburg Hotel Motel Association President Chris Canavos said this fall improved slightly, but that his focus is still on the summer months when it comes to improving business.

“Our biggest problem is the summer; that needs to be fixed first, before anything else,” he said.

Newport News has relatively steady business and military visitors filling hotel rooms, according to Canavos, and Virginia Beach has been working for years to become a year-round destination, which has helped both areas keep occupancy higher in off-season months. Virginia Beach has a good conference business and has also developed a good sports-event market, he says.

Upper-tier hotels have had significantly higher occupancy from September through November in Williamsburg compared to middle- and lower-tier hotels. Canavos credits this to the rate-slashing the more expensive hotels have been doing, which is drawing customers away from other lodgings.

“By dropping their rates, they’re grabbing market share from the middle tier,” says Canavos.

Occupancy and average daily rate changes versus 2009

September occupancy flat with 2009 (at 37.6%), ADR down 7.1 %

October occupancy up 4.1% (from 39.6% to 41.2%), ADR up 3.1%

November occupancy up .7% (at 30.1%), ADR up 3.9%

Average daily rates did drop significantly in September, with rates across the board down 7.1 percent, and rates at upper-tier hotels down 6.2 percent.

In October and November, average daily rates went up, though, and hotels made more revenue per available room. Canavos credits two big college football games in October and Christmas Town opening in November as reasons why hotels were charging more for rooms (rates were up 3.1 percent in October and up 3.9 percent in November).

“Our industry is very reactionary,” Canavos says. “When demand shows strength, the hotel industry reacts fast.”

In a recent presentation, representatives from Smith Travel Research, which supplies hotels with industry information, stressed the importance of raising rates in the Williamsburg area to help hotels beef up poor revenues.

Overall, the fall months weren’t stellar for local hoteliers, who are looking to next summer to decide whether things are looking up for the Triangle.

Comments

+1 #2 Guest 2011-01-05 09:29

Remember greed runs the country. I guess it was OK when CW was the main reason for visiting, but now that they aren't number one in the area it seems to me they're being thrown to the dogs. All I know is that if it wasn't for CW the entire area would be nothing but another cheap tourist area. Like it or not, that's the way it is. I know many people would not agree but that's too bad. Denying the facts don't change the facts.

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+7 #1 Guest 2010-12-30 08:55

It's great to see some strength in demand, but it hasn't taken off yet. The fact that people are taking the higher rates in stride is promising. But, increasing the demand for the destination is paramount going forward. Busch Gardens, the shopping outlets, as well as, the new Pottery should help push the volume needle up over the next couple of years. Unfortunately, we cannot rely on CW because their focus over the past 10 years has been on fundraising than actually increasing traffic in operations. That's a strategic decision on their part and you cannot change that unless CW wants to change. We cannot blame the Timeshares for our miseries. The number of timeshare owners that would of visited our area and stayed in a hotel is small and if the demand had actually been growing, we would of offset that small piece of business. We need to STOP blaming the timeshares and STOP twisting the numbers to make it look better and START with the basics, grow top line demand (Volume). Lets Go, everyone is passing us.

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