Auto Recovery Benefits Detroit Hotels

By Matt Alderton
March 27, 2012

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Thanks to the recovery of the auto industry in Detroit, hotels in Motor City are enjoying a business boom, local newspaper the Detroit News reported this month, citing Smith Travel Research (STR) data from the first two months of the year.

According to STR, the Detroit area had an occupancy rate of 56.6 percent in February 2012, up from 54.9 percent in February 2011. For January and February combined, occupancy was 54.3 percent — the highest January-February occupancy rate since 2006 — while revenue was up 6.5 percent.

"Things are definitely looking up," Ron Wilson, CEO of Troy, Mich.-based Hotel Investment Services, told the Detroit News, adding that the American auto industry's resurgence has led to a "sustained increase for hotel rooms and services," such as meetings and weddings.

Still, Detroit lags behind the rest of the nation: While it enjoyed a 3.2 percent rise in hotel bookings through the first two months of the year, the national average was 3.7 percent.

A regional occupancy rate below 60 percent "does not necessarily represent a strong market," cautioned Charles Skelton, president of Ann Arbor, Mich.-based Hospitality Advisors Inc. To be "a successful market," he said, Detroit needs an occupancy rate above 70-75 percent.
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