<B> PKF Reports Shift In Hotel Occupancy Pendulum</B>
By Maria P. Vallejo
Volume consolidation and flexibility in travel plans still top the list of the best ways to get bargain deals during hotel negotiations despite this year's drop in occupancy--the first annual decrease since 1991.
The 1.1 percentage point decline in occupancy this year compared to 1997 was not substantial enough to drag rates down, according to New York-based PKF Consulting's State of the Industry Report released in August. The report studied 41 markets nationwide and surveyed more than 2,800 hotel financial statements.
"Yes, these occupancies are dropping, but they are not dropping in the order of magnitude to prompt hotels to do significant discounting," said PKF senior vice president John Fox. "Yield management also is allowing them to keep the rates up. With the aid of automated yield management systems and revenue management practices, hotels still will continue to push room rates during peak weekdays and their in-seasons."
The occupancy slowdown being seen in some urban markets-- such as Dallas/Ft. Worth, Nash-ville, Orlando and Philadelphia--is the result of supply growth exceeding demand, the report said. This trend is projected to continue into next year, with occupancy dropping to 72.3 percent from this year's 72.8 percent. "These major urban areas would have been holding up national levels and now they are feeling the effects of supply," Fox said. "Occupancy cannot grow in these markets."
<TABLE BORDER="1" width="250" align=left><tr><TD VALIGN=TOP ALIGN=CENTER COLSPAN=2><B><font size="+2">Biggest Hotel Occupancy Losers</B>
Projected Percentage Decline for U.S.