Hotel Occupancy Rebounding, but with Some Twists

SEATTLE, WA-Chris Burdett, a VP with Colliers International Hotels, has made a career out of turning hotel deals and studying the industry. But for all his experience, he says of the market since September 11, “Nobody’s ever been in this situation before. We’re all having to learn.”

Hotel occupancy had been faltering for a while throughout the US before the attacks, and Washington was no exception. According to a newly-released report from Colliers International Hotels, statewide occupancy through August had declined 2.8%–from 69.3% in 2000 to 67.4% in 2001.

Seattle’s central business district was the only market to buck the pre-9/11 trend, positing positive occupancy growth during that period by moving up from 74.9% in August 2000 to 75.5% in August of this year.

However, immediately following September 11, Burdette tells GlobeSt, “The initial impact was significant. It was quick and dramatic. And, what we say was a sharp decline in the downtown core market.”

While Burdette says patrons are beginning to return to the hotels, he says their #1 concern is safety. And it’s just that concern that has caused some movement from downtown and airport hotels to smaller, lower-profile markets—like Tukwila.

“Secondary and tertiary drive-to markets like Boise, Spokane and Salem have really held their own,” says Burdett. “They did have some initial impact, but since they have actually seen some growth.” Burdett believes the activity hike in outlying areas stems from “smaller groups trying to get out of the city where they don’t feel the trepidation of downtowns and airports.”

“What’s new is the fear factor,” says Burdett, something the U.S. industry has never had to deal with before. “This was new for us in hospitality. We weren’t familiar with it, and (now) we’re having to learn how to respond, how to market.”

Burdett says security has not only become the #1 concern of customers—it holds the same importance for hotel companies and their investors. “We’ve taken security for granted before,” says Burdett, adding: “Now we’re looking fire, life and safety procedures carefully. We’re going to have to go back and reinvent the security side of things and ask the customers what they will need to feel more comfortably.” He says two of the most prevalent suggestions he’s hearing are more security on staff and more stringent check-in procedures.

In the meantime, Burdett says business is starting to pick up as people are “unfortunately getting used to the idea of the events of September 11.”