Increase in Hotel Occupancy Strengthens Detroit’s Recovery Trend
- Dec 09, 2011
Less than six months ago Detroit was facing such a dramatic population decline caused by a sluggish economy that local experts and city officials were forced to come up with a serious rescue plan. Things started to move and today signs of hope can be seen in most industries.
Quoting several reports published by leading hotel information companies, The Detroit News analyzes Metro Detroit’s hospitality industry. Since October 2000, when the occupancy rate was 68.7 percent, the area’s hotel scene began its decline—in 2007 the occupancy rate was at its lowest, with roughly 47 percent—but it has climbed back as one of the nation’s strongest markets. According to Hendersonville, Tenn.-based hotel information company STR, in October 2011 the occupancy rate was 64.50, the highest in ten years, and this ascending trend is expected to continue over the next year. According to business analysts, hotels need at least 60 percent occupancy rate to be profitable. The current revenue per available room of around $50 puts Metro Detroit back on the hotel profitability map, notes The Detroit News.
This increase results from the rebirth of the auto industry which has generated growing business and corporate travel. The playoff run by the Detroit Tigers and the Detroit Lions’ winning season, which attracted a large number of tourists, have also had a positive impact on the hotel occupancy rate.
Photo credits Shakil Mustafa