November's hotel occupancy rates drop sharply

Lodging » Numbers down 12% in Salt Lake, 10% statewide
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Coming off two pretty good years, business was way off last month at Utah hotels.

November's occupancy rate at hotels statewide dropped 10 percent from the same month a year earlier, slipping to 47.1 percent from 57 percent the previous two years. Salt Lake County hotels experienced an even bigger drop-off, from 66 percent in November 2007 to 53.7 percent last month.

"Ten percent or more is pretty significant," said Robert Benton of the Denver-based Rocky Mountain Lodging Report, which compiles occupancy figures from many -- but not all -- hotels in the Intermountain West.

Even with the steep slide, Utah's hotel industry is filling more rooms than its counterparts in Colorado and Wyoming, and is just 1.4 percentage points behind New Mexico. Similarly, Salt Lake County hotels had a higher occupancy rate last month than Denver, although the November-to-November drop in Colorado's capital was half of Salt Lake County's decline.

None of this data is too surprising, given the intensity of the recession that has been brewing, topped off by October's collapse of the financial market.

"Nationally, everything is down," said Benton. But he added the caveat, "One month doesn't make a trend. We have to worry about being panicky."

But, naturally, concern abounds far and wide about where the economy is going.

"We are in a state of 'travel paralysis' that will have a direct and immediate impact on the economy if Americans do not start to move soon," said a statement Monday by René Mack, president of travel and lifestyle at Weber Shandwick, a leading national marketer in the travel, tourism and transportation industry.

Mack predicted business travel will continue to fall, given the ease of video conferencing and the difficulties of booking flights as airlines reduce their schedules. "Most, but not all, destinations, hotels, airlines and cruise lines are going to see their growth, revenue and profit drop. Flat is the new up," he added.

Roxie Sherwin, director of the St. George Area Convention & Tourism Bureau, did not know exactly what to say about the latest numbers. She was reluctant to be too pessimistic, fearing negativity feeds on itself, but unable to find much comfort in an occupancy rate that fell to 37.7 percent last month from 55.8 percent the previous November.

"I looked at that lodging report this morning, then looked at my report from 2007 and thought, 'Wow,' " Sherwin said.

Bookings of packages at the 10 courses in the bureau's Red Rock Golf Trail are down 12 percent, she said, from $450,000 in 2007 to a projected $398,000 this year.

"That's not too bad," she said, optimistic that "our bookings for February and March look pretty good. The phone is ringing again. We feel like we're in a better situation than a lot of states."

Cedar City area hotels had a harder time than St. George, filling 33 percent of their rooms last month. "It's a bad year," said Kwonyoung Chang, owner of Beaver's Days Inn.

Benton attributed part of Salt Lake County's decline to the opening of several new hotels this year, creating a bigger base for calculating occupancy rates.

The percentage also was distorted by the fact four citywide conventions were staged in Salt Lake City in November 2007. They attracted 11,700 visitors. This November, by contrast, just two sizable conventions took place. One of those, a meeting of Lehi-based XanGo LLC, required fewer rooms because so many attendees were Utahns.

Falling faster from greater heights

November occupancy rates in Utah hotels, compared with surrounding states:

State Nov. 2008 Nov. 2007

Utah 47.1 57.9

Colorado 45.2 51.1

New Mexico 48.5 55.2

Wyoming 43.1 49.6

Salt Lake County 53.7 66.0

Denver 51.3 56.3

Source: Rocky Mountain Lodging Report