Saturday, December 13, 2008

Hotels: Occupancy Rates Keep Falling

by Bill McBride on 12/13/2008 11:07:00 PM

From the Orlando Business Journal: Orlando hotel occupancy falls again

Orlando’s hotel room occupancy rate in the first week of December dropped to 57 percent, down 6.1 percent from the same week in 2007 ... occupancy across the nation fell to 50.2 percent during the week, 5.5 percent below 2007 levels.
From the Charleston Regional Business Journal: Charleston tourism drags amid economic downturn
Charleston County hotel occupancy rates fell 13% in September and 11% in October when compared with the same months last year, according to a report from the College of Charleston’s Office of Tourism Analysis.

Occupancy rates, a key indicator of the tourism industry’s strength, have fallen every month this year ...
Lodging is probably the most overbuilt commercial real estate sector. The following graph is probably worth a repeat!

Lodging Investment as Percent of GDP Click on graph for larger image in new window.

This graph shows investment in lodging (based on data from the BEA) as a percent of GDP. The recent boom in lodging investment has been stunning.

Note: prior to 1997, the BEA included Lodging in a category with a few other buildings. This earlier data was normalized using 1997 data, and is an approximation.