Austin Hotel Posts Healthy Forecast

The Austin Visitor Center reports a 16 percent increase in summer visitor traffic and a 22 percent hike year-to-date, indicating another successful year and positive forecast for the Austin hospitality industry.

This increase in summer tourism business further reflects Austin's recovery from the economic downturn and soft tourism market since 2001, according to the 2005 Hotel Industry Report by PKF Consulting. According to the report, Austin's hotel market began to recover late in 2004 and surged in the first quarter of 2005. Increased business travel, large citywide conventions and events, an active legislative session and a spike in leisure travel contributed to the recovery. During the first quarter of 2005, hotel occupancy rates increased 10 percent and room rates increased 8 percent, as compared to the same period in 2004.

Downtown remains the city's strongest hotel market, with occupancy rates stabilizing at approximately 67 percent in 2003 and 2004. The occupancy rate rose an additional 12 percent during the first quarter of 2005, contributing to the increase in foot traffic at the Austin Visitor Center. PKF expects the downtown market to taper off slightly but remain strong through the remainder of 2005 and continue to improve through 2006, but at a slower pace.

The North, Northwest and South Austin lodging markets all increased in occupancy the first quarter of 2005 and the first time since 2000. The report credits overflow business from downtown, a return of corporate meeting demand and the relocation of technology firms in the Northwest sector of the city.

The report states that it will take several years for Austin to surpass the high levels seen before 2000. Despite obstacles, however, the city has begun to develop a reputation as a national convention destination and has the potential to once again become one of the top performing metro areas in the country.

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