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Thursday, February 3, 2011 - 11:21am

Hotel Room Demand Up, Rates Rising

Expect to pay more next time you check in to a hotel.

Room rates are on the rise in Georgia and across the nation because demand for rooms is up and there’s no new supply on the horizon, according to hotel industry analyst Mark Skinner.

“There are very, very few new hotels coming down the pipeline because financing for new hotel construction is extremely difficult to obtain,” said Skinner, a partner with Atlanta-based hotel consulting and research firm The Highland Group. “It’s the most difficult to obtain that it’s been for decades.”

After a significant drop in rates and demand for rooms in 2009, the industry saw some improvement last year. Skinner says room occupancy and demand historically recover after a slump, so 2011 will be a strong year.

“The difference now [from] most up-cycles in the past is that there are very, very few new hotel rooms coming into the marketplace, so the ability to raise room rates is very good at this present time,” Skinner said.

Skinner predicted a 3 percent to 5 percent average increase in room rates across the state and higher in some areas.

For example, he told the Savannah Area Tourism Leadership Council earlier this week that hotels in Savannah’s historic district could raise rates by 8 percent this year and 10 percent next year.

Skinner said there will be no significant new supply of hotel rooms until 2013 or 2014 at the earliest.