Fewer filling in hotel vacancies

The lobby of the Chancellor Hotel in San Francisco

TEXT OF STORY

Scott Jagow: The hotel company Marriott releases its latest profit report today. Just like every other industry, the hotel business is suffering. But some are doing worse than others. Stacey Vanek-Smith explains.


Stacey Vanek-Smith: Hotels may be leaving the light on for us, but we're not coming. Occupancy rates in May were down 3 percent from 2007, and that was before gas prices really took off.

Scott Berman: Each type of hotel is a different business model.

Scott Berman is a hospitality consultant at PriceWaterHouseCoopers. He says hotels in big cities and luxury hotels are faring OK thanks to international travellers, but the low, local end is getting hit hard.

Berman: Hotels that are rooms only and price sensitive, along the interstates are probably feeling it worse.

But that may change, says Bobby Bowers with Smith Travel Research. He says when summer ends, higher-end hotels will have to rely heavily on business travelers. If companies continue to cut back travel budgets, those hotels could be left high and dry.

Bobby Bowers: So that September October timeframe, that's going to tell us a whole lot about how the year will wind up.

Bowers says if bigger hotels start discounting, it could mean bad news for the industry.

I'm Stacey Vanek-Smith for Marketplace.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.

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