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Hotel Occupancy Increasing, Rates Sluggish, Study Finds

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Occupancy at Orange County hotels continued to climb in May, while room rates remained sluggish as innkeepers battled to lure summer travelers.

On average, 75.1% of the county’s hotel rooms were full last month, up from 73% last year according to data collected by PKF Consulting, a Los Angeles-based hospitality consulting firm. However, the average room rate of $80.61 barely budged from a year ago and declined 3.7% from the $83.71 average rate posted in April.

PKF researcher Melissa Mills credits the robust tourist trade and a resurgence in business travel for the strong demand for area hotel rooms. Occupancy has been increasing all year, fueling expectations that room rates would follow. But Mills says hoteliers appear to be holding the line on rate hikes as they try to lure the price-sensitive vacation crowds.

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“It looks like hotel operators are being cautious on rates to avoid killing the golden goose,” Mills said.

Room rates in bellwether Anaheim averaged $83.50 in May, down 1% from the same period a year ago and off sharply from the $89.15 average posted in April. Meanwhile, May occupancy reached 79.7% in the city’s hotels, up slightly from 78.6% in May 1995.

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