San Antonio Hotel Outlook Seen as Promising
By Melissa S. Monroe
San Antonio Express-News
SAN ANTONIO, TX, November 23, 2005. San Antonio hotels can expect stronger occupancy rates for the next 10 years, a hotel consultant predicted Tuesday.
"San Antonio can be a 70 percent-occupancy marketplace like it did before. It can get back to historical occupancies in the high 60s to low 70s for the rest of the decade," said John M. Keeling, senior vice president of PKF Consulting in Houston, at a San Antonio Hotel & Lodging Association luncheon.
Local hotels often enjoyed 70 percent occupancy levels before leisure travel slumped after the Sept. 11, 2001, terrorist attacks. Occupancy is slowly inching back up, Keeling said, although rates have been taking longer to reach the point where it's profitable to build hotels. For the purveyors of San Antonio's 31,000 hotel rooms, this is a welcome sign. Keeling is optimistic because the region's economy is healthy and competition for group business is intense.
As the year began, Beth Ticku, marketing director for La Mansion and Watermark hotels downtown, thought it would be a challenging year. But she estimates both hotels will finish the year ahead of 2004, and that both will rank in the top 10 in Texas in revenue per room. The only challenge, she said, is getting room rates back to pre-9-11 levels. "We can only do it for so long in keeping low rates, and then we need to get back where we used to be," she said. "Signs in the economy are saying it's fairly stable." Hearing Keeling's assessment is encouraging, said Marilyn Ortiz DeSimone, general manager of El Tropicano Riverwalk Hotel. Not all cities can say they have steady growth, she said. The challenge is knowing when to raise rates without losing business, she said.
PKF reports that local hotels will end the year with occupancy below 70 percent, but next year occupancy could reach above 70 percent. San Antonio's hotels have enjoyed steady growth in occupancy, Keeling said, because the hotel industry isn't overbuilt as it is in Austin. From 2001 to 2004, San Antonio's room supply grew less than 2 percent, while Austin posted a 7 percent increase in a single year -- 2001.
It's only been this year and next that San Antonio will reach nearly 3 percent in room supply growth. The city will also get more hotel rooms in 2008 with the 1,000-room Hyatt Convention Center hotel. Unlike other cities that don't need larger hotels or bigger convention centers, Keeling said, San Antonio can use both. Convention center hotels, Keeling said, do better in a big leisure market such as San Antonio compared with a city such as Dallas, which is more of a business destination. He added that San Antonio still must find ways to lure tourists.
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Copyright (c) 2005, San Antonio Express-News
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