"We are seeing a higher occupancy rate for all hotels, and the average daily rate is slowly coming back," said Ed Grose, executive director of the Greater Philadelphia Hotel Association. "We are hoping this trend continues for the rest of the year.
"While we are not back to previous levels, the numbers from the summer are great news, especially when you consider the new hotels that have come into the city," Grose said.
The newcomers are the 230-room Palomar, which made its debut in October, and the 202-room Le Meridien, which opened in May. The two upscale hotels raised Center City's total room inventory 4 percent, to 11,155.
Nick Gregory, general manager of the Palomar, at 117 S. 17th St., said his hotel averaged 80 percent occupancy in July and August.
"We made our budget, but we got there through occupancy, not through [room] rate," Gregory said. "No one is making it on rate; everyone is going after occupancy."
The local numbers reflected national trends. For the week ending Aug. 28, U.S. hotel occupancy was up 10.6 percent, while the average daily rate was up 2.4 percent year over year, according to Smith Travel Research. The revenue generated from each room, or RevPAR, was up 13.2 percent.
"Strong weekly results continue to underscore our positive outlook for the hotel sector," said C. Patrick Scholes, lodging analyst with FBR Capital Markets & Co. Inc. "They definitely show the sector is on the upswing, and definitely driven by the return of the business traveler. But August results showed higher-than-expected strength with the leisure traveler, as well."
Among major U.S. urban markets, New York City led the pack in pricing power, he said, "whereas Philly is more concerned with filling its hotel rooms and the pricing will come later, assuming that demand continues to improve."
