February 26, 2005—Orlando's hot hotel market was at or near the top nationwide in a number of key growth categories in 2004 -- and it might do even better in 2005, a representative of one of the nation's leading industry research firms said Friday.
The Orlando area's average hotel occupancy rate last year, for example, was the fifth best in the country at 70.7 percent, well above the national average of 63.1 percent, said Brian Ferguson, vice president for marketing and strategy with Smith Travel Research, based near Nashville, Tenn.
In terms of room rates, Orlando was in the middle of the pack among the top 25 markets, averaging $87.78 for the year. That was only slightly higher than the national average. But Orlando's 2004 vs. 2003 rate of growth in the category -- 3.8 percent -- was good enough to crack the national top 10.
Orlando should do even better at boosting room rates in the coming year, he said.
"You should see rates go up more," Ferguson said, because of the lag in group-travel price increases. Orlando has more group travel than many markets, he said, and groups have longer-term contracts that take time to reflect price hikes.
The company does not make specific forecasts for regions, he said, but revenue-per-available room, a key measure of industry health, should rise another 7.1 percent nationwide in 2005, after posting a healthy 7.8 percent increase in 2004.
"These are great numbers," Bill McCreary, president of Tishman Hotel Corp. in Orlando, said as he left the meeting at the Grande Lakes Resort Orlando.
Grande Lakes, home of the nation's only side-by-side Ritz-Carlton and JW Marriott, is the type of luxury category doing even better than the lower-priced categories as the economy grows, Ferguson said.
Orlando has been adding to its luxury and upscale stock at a faster rate than other categories in recent years, with properties such as the Grande Lakes and Omni Resort at ChampionsGate.
Ferguson said that, while Orlando's room supply grew about 2.1 percent in 2004 -- the fourth-highest percentage increase among top markets -- demand was growing even faster. Orlando's increase in room demand, 15.2 percent, was tops in the nation, also by a wide margin.
While the nation's hotel industry was "shocked" by the falloff in travel after the Sept. 11, 2001, terrorist attacks, Ferguson said, the industry has gotten leaner and smarter. So while revenue per room fell nationwide for two straight years, in 2001 and 2002, before rebounding slightly in 2003, the industry overall remained profitable throughout the downturn.
Smith Travel estimates that, even though profitability slipped between 2000 and 2003, the industry overall has not lost money since the late 1980s and early 1990s.
Jerry W. Jackson can be reached at 407-420-5721 or email@example.com.
Copyright (c) 2005, Orlando Sentinel | Get home delivery - up to 50% off