(Carl Cronan is editor of Real EstateFlorida.)
TAMPA, FL-New hotel rooms are a welcome sight to travelers, but may not work out so well for existing operators. An industry report shows hotels in the Tampa-St. Petersburg market are losing at least 10% of their revenue per available room compared with a year ago.
The latest "RevPAR Roominations" report by J.P. Morgan Securities Inc. points to the Tampa Bay area as being among the nation's laggards in this key measurement of hotel performance. For the week ending April 19, Tampa-St. Petersburg RevPAR declined 10.5% over the year, with only Phoenix suffering a worse loss at 17%.
Those declines appear steep against a national RevPAR decrease of 3.1% over the past year, partially attributed to fewer rooms being reserved during Passover, which fell on April 20 this year. However, another likely factor is an abundance of new hotels being built in areas experiencing falling revenue, creating greater competition to attract overnight guests, says C. Patrick Scholes, lodging analyst with J.P. Morgan in New York City.
"New supply doesn't help you raise rates," Scholes tells GlobeSt.com. Approximately 2,000 rooms are set to open in and near Tampa in time for Super Bowl XLIII early next year, increasing its inventory by at least 10%, based on data from Smith Travel Research.
Scholes also notes that Tampa doesn't attract as large a volume of international visitors as other major Florida markets such as Miami and Orlando. Interestingly, RevPAR in the much-larger Orlando hotel market declined only 0.3% over the past year, while that for the Miami-Hialeah market actually increased 6.3%, according to Smith Travel Research. Among other Southeast hotel markets tracked in J.P. Morgan's report, year-over-year RevPAR declined 3.4% in Atlanta and 7.6% in New Orleans, yet increased 1.5% in Nashville, TN.
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