I think we all are breathing a collective sigh of relief as we reflect on how positive 2005 was and we look forward to an even better 2006.
Robert Hayward with Warnick & Company provided us with an extremely positive recap of 2005 and a promising 2006. 2005 proved to be a great and robust year with an increase in room demand for the Phoenix Valley. In fact this was the 3rd year in a row that demand outpaced supply due to the overall net decrease in supply and increase in visitation. We did see a robust increase in room rates, but in comparison to the economy rates are still low.
Our resort market occupancy eclipsed the 70% level for the first time since 1997. The resort market also experienced a solid ADR growth for the 2nd year in a row. The rate growth was experience by luxury and non-luxury resort properties.
The United States overall occupancy raised by 2 points bringing it up to 63% and RevPAR increased by $4.41 bring it to $57.34. Factoring in inflation RevPAR is still below pre 9/11. Compared to the US market Phoenix had higher occupancy, ADR, and RevPAR.
The Phoenix valley's overall room supply increased by 1,070 rooms, but we experienced a decline in room inventory due the annualized impact of 4 resorts closing. In the marketplace our product is still considered relatively fresh and new. In 2006 we'll see a slight increase in room supply for hotels and resorts due to closings and relatively few new builds.
Looking ahead we should expect to see growth starting in 2007 with more unique upscale products both boutique and residential properties and convention oriented due to an increase in demand. We should continue to see a strong rate growth in 2006 and longer booking windows. Our challenges will be rising labor, security, and insurance costs, sustaining average rate growth, and the ever present cost of energy. Visitors will continue to see the Phoenix valley as an ideal destination due to location, amenities, and our future growth.
Many thanks to our gracious meeting hosts and sponsors, F1 Race Factory and Victoria's Catering; to Scottsdale Camelback Resort for hosting our students from NAU and to Eric Bahr for the photo memories.
Our January Slideshow!