January Meeting Recap
Metropolitan Phoenix Lodging Market: An Industry Update
A Review of 2003 Market Performance and Forecast for 2004
Mr. Robert Hayward, Warnick and Company, specializes in development and operational consulting, financial, investment and market feasibility analysis for a wide variety of projects within the hospitality, gaming, recreation, and leisure real estate industries. Mr. Hayward shared valuable statistics gathered by Warnick and Company.
- 2003 was stronger than expected. Occupancy was up. The addition of three new major resorts (Westin Keirland Resort, Marriott Desert Ridge and Sheraton Wild Horse Resort) in 2003, caused a new and revived interest in groups and individuals coming to the Valley. However, occupancy for Phoenix was at 59.6%, which did not place us in the Top 10 in the nation.
- Phoenix was third in the nation for supply growth (adding 1810 new rooms) in 2003, finishing behind Boston and St. Louis.
- Demand growth for Phoenix was at 6.6%. Anaheim was the #1 finisher.
- From the YTD numbers collected in November 2003, Phoenix was #10 for ADR with $93.94. New York was #1. ADR was the main problem in 2003. In 1996 the ADR was $94.02, and has dropped since then despite inflation.
- Phoenix was 6th for ADR growth with .5%. Miami was #1.
- The Supply in Metro Phoenix was calculated at 55,500 rooms.
- In 2003, Phoenix had 32,956 average occupied rooms per day.
- Phoenix did better than the overall US statistics in 2003.
Forecast for 2004:
- Occupancy is expected to get up to 62.5%, the first time it would be over 60% in years.
- Supply should have a mild increase in 2004. The James Hotel is due to open in the first quarter of 2004. There are a number of other developments in the works for 2005 and beyond.
- Demand is expected to continue to increase.
- ADR is expected to be up.
1) Rate, 2) Evidence of continued recovery since September 2001, 3) Travel patterns, 4) Airline industry- Critical - Fly-in vs. Drive-in, 5) Enhanced destination appeal, 6) Diminished labor pool- issue since 2000, 7) Increased external competition (resorts and conventions), and 8) Arizona's emergence as Spa destination for groups
Thank you to the Radisson Resort & Spa Scottsdale for hosting our meeting and treating us to a wonderful buffet. An additional thank you to Bill Johnson, CSP for donating the LCD projector. Raffle donors were America West Magazine, Radisson Resort & Spa Scottsdale, Merestone Productions, Broadway Palm Dinner Theatre, Little America Hotel, Fort McDowell Adventures and the HSMAI "Cowmoo"nications Committee.