06-26-2006 9:29 AM — If you aren't paying attention to Nashville's hotel industry, maybe you should. It continues to do well, and that fact may mean that one or more of the several hotel projects floating around will actually get built.
Hendersonville-based Smith Travel Research's latest figures show that Nashville's hotels posted yet another stellar month for average occupancy, with May coming in at 66.6 percent (not sure if that ominous combination of numbers will sit well with some folks). The occupancy was 11.9 percent higher than last year and once again exceeds the national average occupancy, which was 64.8 percent.
Year-to-date occupancy rose to nearly 64% from 59.6% over the first five months of last year. And average daily rates continue to rise as well. In May, the average rates jumped 8 percent from $76.92 to 83.04. Through the first five months, average rates are at $83.37, compared to $77.11.
Nashville occupancy increase was the second highest of the Top 25 markets in May. For the year, Music City has the third highest increase. Nashville's room rates increase was about middle of the pack, all cities increased. But Nashville was third in revenue per available rooms and second for rooms sold.
Downtown hotel occupancy continues its trend of better than 70 percent with 73.6 percent, marking another monthly increase over previous year figures. Downtown hotels also have been the best performing of any other area of Nashville. For the year, the average is 74.5 percent, 5.1 percent higher than the same period last year.
Downtown average rates are up as well, staying firmly above a $100 per night. In May, the average was $110.91, an 11.6 percent increase above May 2005. For the year, the average is $108.91, a 9.5 percent increase over last year.
For months, though, hospitality industry officials have warned that these figures could start to dip next year as Nashville continues to lose out on big conventions because the current downtown one can't compete.
Still, strong numbers like these typically give developers confidence to build more hotels. Denver-based Sage Hospitality Resources and Springdale, Ark.-based The Barber Group wants to build a Westin downtown. Developer Tony Giarratana has room for a hotel in his 65-story Signature Tower. Baltimore-based Struever Bros., Eccles & Rouse has plans for a hotel next to a new ballpark for the Nashville Sounds.
In midtown, developer Alex S. Palmer is trying to build an InterContinental on West End and Westin's sister brand W with Starwood Hotels & Resorts is said to be angling for the Music Row Roundabout.
Who actually builds is anyone's guess. But certainly, the race is on.
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