Downtown Denver’s hotel market remained strong in 2006, despite a major influx of new inventory from the 1,100-room Hyatt Regency Denver at Colorado Convention Center, which celebrates its first anniversary today.
At this time last year, some industry insiders feared the downtown hotel market was becoming overbuilt and that occupancy rates would plummet in 2006.
Instead, the market has remained healthy with a 70.6 percent occupancy rate through November, up 1 percentage point over the same period last year, according to the monthly Rocky Mountain Lodging Report released Tuesday.
“It typically takes time to absorb as many rooms as we added, but the Hyatt really took off,” said Robert Benton, author of the lodging report. “It has been a good demand generator for the overall market.”
Average room rates in downtown grew steadily for the same period, up from $131.87 last year to $140.87 through November of this year.
“The Hyatt has done exactly what it was supposed to do, which was to prime the pump for downtown,” said local hotel consultant John Montgomery.
Much of the increased demand came from the growth in meeting business seen since the Colorado Convention Center opened its $310 million expansion in late 2004.
The total number of metro- area hotel-room nights booked for meetings and conventions grew from 433,829 in 2005 to 526,098 this year, according to the Denver Metro Convention & Visitors Bureau. The number of conventions hosted grew from 420 in 2005 to 538 this year.
Next year is on pace to be Denver’s best ever for meetings, according to convention bureau president Richard Scharf. A total of 239 meetings and conventions and 517,373 room nights are on the books, 38 percent ahead of this time last year.
“We’ve seen a substantial growth in bookings,” he said. “The future looks very bright for Denver right now.”
Downtown Denver has 6,183 hotel rooms, according to Benton. Next year, roughly 700 more are expected to come on line, including those in a $75 million Ritz-Carlton Denver, the $30 million Curtis and a $35 million Hilton Garden Inn.
“Staggered growth like this is what we want to see, ” Montgomery said. “What we don’t want is 10 hotels opening in the same year.”
Several analysts said they expect the Ritz to keep pushing up average daily room rates. The luxury hotel chain said it would release its pricing about 90 days before its late-summer opening.
“We’re going to introduce a new level of service to Denver, and the other hotels out there are going to try and compete,” Ritz director of sales and marketing Shannon Gilbert said.
Statewide, occupancy rates through November rose 2.4 percentage points to 63.5 percent. Average room rates have risen $8.58 to date this year, to $112.39.
Staff writer Julie Dunn can be reached at 303-954-1592 or jdunn@denverpost.com.
