Hotel Occupancy Up; Room Rates Down

ATLANTA-With an improved occupancy level of 65%, the area’s 80,000-room hotel inventory is showing signs of improvement but won’t be on solid ground until 2004 and 2005, according to a new industry report by Marcus & Millichap.

New construction will add only 1,000 rooms per year through 2005, compared to 2,800 rooms per year in the late 1990s. The average daily room rate has dipped 1.5% to $73.70 from $74.85 a year ago. But local hoteliers aren’t offering the same freebies their Orlando counterparts are throwing at their tourist-oriented clientele.

“Operators in Atlanta need not offer the discounts found in Orlando, as business travelers that make up a larger percentage of Atlanta visitors, are not as sensitive to room rates as leisure travelers,” says Adam P. Weber, M&M’s senior market analyst in the company’s Phoenix office.