That's still better than the national occupancy rates which averaged 63.2% in 1999 and 63.9% in 2000. The study anticipates national rates will dip this year to 63.7%. Factors affecting the Atlanta market include a softening of the construction market and metro-wide layoffs among area employers such as Lockheed Martin, Coca-Cola, BellSouth and CNN.
On the plus side, the tight labor market is absorbing jobs rapidly, convention business is up and there are some major changes afoot that will increase the demand for hotel space in the near-term. Among them are the redevelopment of the 140-acre Atlantic Station (the former Atlantic Steel site) in Midtown and the $220 million, 450,000-sf expansion of the Georgia World Congress Center Downtown.
The report suggests average daily room rates in the metro area will increase. Rates were $79 in 1999 and $82 last year and may reach $85 per day in 2001. Nationally, room rates could average $88, an increase of 4% over 2000.
In Atlanta, hotel inventory increased at an annual average rate of 4.5% during most of the 1990s and dropped to 3% in 2000. Inventory in 2001 is expected to drop to 1.8%.
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