Hotel room prices, which have risen in demand over the past year, may now be hampered by tourism due to rising inflation, state tourism officials said.
Visit Florida tourism marketing agency held a record number of tourists in the first quarter, and when they met in Orlando last week, staff and executives also expressed concern that hotel room costs are being affected by rising occupancy rates.
“I think we’ve started to see that in the last few weeks or so, inflation has really started to catch up with us in most markets,” said Jacob Pewitt Yancey, Visit Florida’s director of consumer insights and analysis.
“Now, overall room revenue is still rising in all markets across the state because the rate hike has been enough to overcome the reduced level of demand,” said Pewitt Yancey. However, he added: “I think we have started to get into a period of time where we may not be able to keep that true.”
Nationwide hotel occupancy slowed as expected after Memorial Day, according to STR, Inc., which provides data to the hotel industry.
STR did not show any of the top 25 U.S. markets that have seen an increase in occupancy from May 29 to June 4 at the same time in 2019, before the COVID-19 pandemic.
Nationwide, employment was 63.2%, down 12.1% on the same period in 2019. Meanwhile, the average daily rate rose 11.3% to $ 147.35 from 2019 onwards. Despite the increase, revenue per available room fell by 2.2%.
In the STR’s weekly poll, Miami had the largest average daily rate hike nationwide, up 37.8% from 2019 to $ 209.55.
With an occupancy rate of 68.9%, Orlando was the closest to the domestic market – 2.5% less – than the previous pandemic mark.
The numbers are also staggering as business trips fall far short of pandemic totals.
Outgoing Visit Florida Council President Danny Gaekwad MGM Hotel owner said hosts and other businesses need to make rate adjustments.
The point is to find a balance with the daily rates that maintain profits.
“We made a profit during the ADR era [the average daily rate] and the occupation was both on the rise, ”Gaekwad said. “And now we have to adjust inflation and other reasons, gas prices or whatever, we’ll have to adjust rates or we’ll have lower occupancy.”
Last month, when Governor Ron DeSantis announced a record 35.98 million visitors – mostly home travelers – from early January to the end of March, his office reported that the average daily rate in Florida had risen more than 38% over the same period in 2021 and the occupancy rate was almost It has grown by 24%.
These gains may not be comparable in the second quarter of 2022.
For every 10 percent of room rates, demand is now down 6 percent in Florida, Pewitt Yancey said.
Until the last two months, total room demand in the state was above the 2019 level, and for many weeks it was above the 2021 level, Pewitt Yancey said. However, demand was not evenly distributed.
“Until about a month ago, what was happening was that demand was crazy not only in Orlando but anywhere else, especially Sarasota,” Pewitt Yancey said.
Orlando’s delay could be attributed to business trips not returning to pre-pandemic levels, Pewitt Yancey said.
But over the past month, the demand for Orlando rooms has been surpassing 2021 numbers, but the rest of the state has dropped.
“All the markets in the state, in terms of demand for rooms, have gone down. But Orlando is so high now, compared to where it was, that numbers across the state are staying positive, ”Pewitt Yancey said.
The fall outside of Orlando is not below the 2021 tourism recovery. Pewitt Yancey said it is “starting to fall below 2019 levels in one-third of Florida’s markets.”
Board member Lino Maldonado, chairman of BeHome 247 Technologies, said Airbnb operators, who were in high demand during the pandemic, are trying to find a balance between rates and occupancy to determine profitability.
“We’re still north of the 2019 numbers, but I think the ADR will definitely go down,” Maldonado said.
Jim Turner reports to the Florida News Service.