WASHINGTON D.C. – Consumers should have an easier time finding more affordable rates here, thanks to newly opened hotels, hotels under renovation and continued weakness in government travel demand, according to hotel executives’ remarks to Wall Street investors during their Q1 earnings calls over the past week.
During the calls, C-level executives of publicly traded hotel companies Marriott, LaSalle Hotel Properties and Host Hotels & Resorts told investors about the above factors drove down financial results for the city during the January-March quarter. No one said they expected a significant change during the rest of this year.
“We expect DC hotels will remain challenged in 2014,” said Host Hotels CFO Gregory Larson. Host, a Fortune 500 company, is the largest lodging real estate investment trust and one of the largest owners of the country’s highest-end hotels.
Consumers should pay attention because poor results for Wall Street typically means good news on Main Street.
The typical industry measure of revenue per available room in Washington declined by 10% in Q1, based on a nearly 8% decrease in occupancy and a nearly 3% decrease in average daily rate, LaSalle CFO Bruce Riggins told analysts. During the period, LaSalle updates several properties in the region: two Kimpton properties – Hotel George and Donovan House – and the Hilton Old Town Alexandria, CEO Mike Barnello noted.
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Marriott’s $520 million new hotel
The biggest source of new rooms here is Marriott International’s opening last week of the Marriott Marquis.
Connected to the convention center, the $520 million hotel has 1,175 rooms and 105,000 square feet of exhibit space for meetings.
The hosting of the Presidential Inauguration last year also hurt Q1 results because this year Washington didn’t have a significant event with which to fill its rooms. For Host, an additional factor that hurt Washington results was the renovation earlier this year of its Hyatt hotel.
Pebblebrook CEO Jon Bortz said they expect the Washington hotel market to be “a significant underperformer” for at least the next two or three years. The long-term view, however, is positive.
After praising double-digit growth in revenue per available room in cities such as San Diego, San Francisco, Los Angeles and Denver, Marriott International CEO Arne Sorenson told analysts said “tough comparisons to a variety of events last year restrained growth” in Washington as well as New Orleans and New York.
Consumers: Are you seeing bargain rates in Washington these days?
Hoteliers: How are you going to stand out in this environment?
Photo above of the new Marriott Marquis taken by Isaac Maiselman; courtesy of Marriott International.
Photo above of a public area at the newly renovated Hotel George, a Kimpton property, taken by Barb DeLollis. Photo of the Capitol also taken by Barb.