Fewer hotel bookings pose challenge in downtown Phoenix

[Source: Jahna Berry, Arizona Republic] — The ongoing travel recession and, to some extent, city-built Sheraton in downtown Phoenix are putting pressure on central Phoenix hotels, some hotel owners say.  Tourists are traveling less and spending less, dampening the travel boom that hotel owners hoped would follow last year’s completion of the Phoenix Convention Center’s $600 million expansion.  Properties are responding in a variety of ways:

• Last week, the Wyndham Phoenix Hotel asked for and received a 20-year tax discount from Phoenix that will save the hotel at 50 E. Adams St. $400,000 annually.  The deal will finish the hotel’s renovation and switch to the Marriott flag from Wyndham, which, the majority owner says, will drum up business.
• The Lexington Hotel Central Phoenix, 1100 N. Central Ave., is open but is seeking Chapter 11 bankruptcy reorganization, court records show.
• The Clarendon Hotel is starting a new promotion geared toward business travelers that will give hotel guests $20 cash for each night they stay there.

In the 14 months that it has been open, the 1,000-rooom Sheraton also has changed the market.  Phoenix built the hotel to accommodate larger conventions that were expected to meet there.  Although several groups, including the National Rifle Association, brought tens of thousands of new tourists to Phoenix, those bookings have tapered off.

Nationally, “distressed hotels are the way of the world right now because of the debt that they are carrying and because there is no business,” said Jeff Higley, a spokesman for Smith Travel Research.  “There are hotels that are struggling to meet payroll.”

The Phoenix market has been one of the hardest-hit travel markets in the nation.  From January though November, city hotel occupancy fell 12.6 percent and the average room rate tumbled 15 percent, compared with the same period in 2008.  A key barometer slid 26 percent in the city.  Revenue available per room is the amount of money generated per room excluding extras such as food and spa visits.  Only New York’s RevPar figure dropped more in that period.  It declined 28.1 percent, according to Smith Travel.  [Note: To read the full article, visit Fewer hotel bookings pose challenge in downtown Phoenix.]