High season for hotels, motels off to slow start

Gazette, The (Colorado Springs), Jul 22, 2003 by RICH LADEN

Three of every four hotel and motel rooms were occupied last month in the Colorado Springs area - a huge disappointment for the local lodging industry.

The Springs' hotel and motel occupancy rate of 74.5 percent in June was down from 83.4 percent during the same month last year - the largest year-to-year drop on a percentage basis since March 2002, according to the monthly Rocky Mountain Lodging Report, released Monday.

The rest of Colorado fared about the same. Nearly all the other communities surveyed for the report also saw a decrease in occupancy during June.

A slow start to the area's tourism season, an uncertain economy and overbuilding in the lodging industry were among reasons cited for the decrease in room rentals.

"There's so much uncertainty in the economy that they're (tourists) uncomfortable traveling," Robert Benton, a lodging industry consultant and the report's author, said Monday.

Helen Beulke, vice president of the Colorado Springs Convention and Visitors Bureau, blamed lingering effects of a lousy national economy, which has led to reduced business travel.

"Corporate travel is an integral part of the Colorado Springs room night base," she said.

Because of a slow recovery, some people who only now have regained jobs or improved their finances choose to buy a refrigerator or something else for their home rather than going on vacation, Beulke said.

George James, co-owner of the 16-room Dillon Motel in Manitou Springs, blames an overbuilt hotel and motel market. As thousands of rooms have been added in recent years, it's tough to keep them full.

"We need to bring into this area 6,000 more vehicles every day to compensate for the overload in the hotel rooms," James said. "And that's not happening."

Other factors were at play, too. June was rainy, Beulke said. During last year's 137,000-acre Hayman fire, displaced homeowners and firefighters filled hotel and motel rooms - something that's not happening this year, she said.

Lower occupancies meant cheaper rooms. Room rates averaged $75.12 per night during June, down 7.8 percent from the June 2002.

"Hotels tend to get more more aggressive in their pricing when occupancy is not strong," Benton said. "In past seasons, including last year, they were getting a higher occupancy, so they could command a higher rate. When things are softer, everybody lowers their rates to provide a better value. Nobody wants to lose a guest."

Occupancy is important to Colorado Springs city government as well. The city collects a 2 percent lodging tax and uses the money for tourismrelated activities.

A survey by the Convention and Visitors Bureau, meanwhile, indicated the recent Fourth of July weekend was so-so for tourism.

About half of hotels and motels responding to the survey said they saw a decrease in business from the same time last year.

About 75 percent of area attractions, however, reported an increase in foot traffic and revenue.

HOTEL, MOTEL OCCUPANCY RATES

June June

2002 2003

Colorado Springs 83.4% 74.5%

Cortez 70.3% 67.7%

Denver 72.8% 72.3%

Durango 82.4% 77.3%

Estes Park 66.7% 63.4%

Fort Collins 68.2% 64.8%

Glenwood Springs 75.1% 79.1%

Grand Junction 80.6% 74.1%

Montrose 79.2% 70.5%

Resorts

(Vail, Aspen, Winter Park, etc.) 45.0% 38.5%

Salida 74.2% 65.9%

Elsewhere in Colorado 68.8% 66.3%

Entire state 69.3% 65.8%

SOURCE: Rocky Mountain Lodging Report