Hotel occupancy to increase: Colliers

After seeing occupancies decline and rates decrease, hotels are now starting to see more demand as business travel picks up, the New York Times reported. Occupancy rates increased by close to 6 percent last year, according to the 2010 Hotel Horizons report by Colliers PKF Hospitality Research. However, average room rates were generally flat. Analysts say that hotel rates will begin rising again this year. “We still have a long way to go, but we’re seeing early signs that because of strong demand recovery in 2010, managers are beginning to move room rates,” said R. Mark Woodward, president of Colliers PKF Hospitality Research. “We’re literally at the turning point.” An increase in business travel has helped drive up demand for hotel rooms, while the number of meetings booked this year is expected to grow by 8 percent, according to Bruce MacMillan, president and CEO of the trade group Meeting Professionals International. To give more liquidity to the market, some hotel management companies have also been stepping in to help developers obtain financing. “There are various ways of supporting the financing without becoming the lender directly,” said Frits van Paasschen, chief executive of Starwood Hotels and Resorts. “We do believe it’s important to help spur development of properties in markets where we think there are great opportunities.” [NYT]

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