2011 Forecast: Occupancy firming, room rates to rise

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After years of a down market, hoteliers anticipate a better year in 2011.

A full recovery isn’t in the cards but most in the hospitality industry expect increases in occupancy rates and room rates.

Two international events slated for summer and new to Colorado Springs will bring tens of thousands of visitors and spectators to the city: the U.S. Women’s Open golf tournament, and the Quizno’s Pro Challenge cycling race.

That’s, of course, in addition to the annual Pikes Peak International Hill Climb auto race and the Pikes Peak Ascent and Marathon foot races, which also bring in thousands of racers and spectators.

Corporate, group and convention business is expected to increase as well.

It’s why some of the key players in the local hotel industry are optimistic.

“We expect good growth in the downtown corridor for 2011,” said Allen Paty, general manager of the Antlers Hotel.

Paty expects occupancy at the Antlers to increase 3.5 percent next year, with room rates increasing about 3.6 percent.

And at The Broadmoor, occupancy — for group and convention business — is expected to increase about 3.5 percent, with room rates increasing about 4 percent.

“It’s a slow take back,” said John Washko, VP of sales and marketing at The Broadmoor.

“Everyone’s having a difficult time reclaiming room rates.”

One of the big challenges for the local hospitality industry next year will be dealing with the recently lowered government per-diem rate. It dropped $4 on Oct. 1, from $88 to $84 per night.

Hoteliers also say they need to increase room rates to regain ground lost from corporate cutbacks on travel that pre-dated the recession. Losing 5 percent of the per-diem rate will make raising room rates even more difficult.

Jim Breeden, general manager of The Colorado Springs Marriott, said rates at the hotel are expected to increase 1 to 3 percent, with hoped-for increases in occupancy of 1 or 2 percent.

As for hiring? There’s not much hope on the horizon for next year. Hiring could increase in 2012, but for now, most employers in the industry expect to do little or no hiring.