Downtown Hotel Rates Show Significant Jump In January

Room rate growth at urban U.S. hotels in January increased 8 percent compared with January 2004, according to data released today by UBS Investment Research, drawing on advanced statistics provided by Smith Travel Research. Revenue per available room for these hotels in January rose 6.5 percent. Deluxe chains saw a 14.4 percent jump in RevPAR, pacing all segments.

The data are the most recent indication that the 2004 lodging industry rebound has continued into the new year. With a significant portion of business travel centered downtown, buyers face a great challenge in negotiating room nights in these locations.

"Urban hotels are a key segment for many of the large multi-brand companies, including Hilton Hotels Corp. and Starwood Hotels & Resorts Worldwide," said Will Truelove, UBS lodging analyst. Buyers who have not yet secured the room nights they need in downtown hotels can expect to be offered less attractive rates.

This January was different from recent years, as the month typically is a slow period for the lodging industry. "Availability in the major cities in particular has been a real issue," said Tina Itschner, corporate travel and purchasing manager for HNTB in Kansas City, Mo.