Detroit Enjoying Improved Convention Business, Hotel Occupancy

Thanks to the renovation and expansion of the Cobo Center, convention business in Motor City is "showing promise," according to Tom Walsh, a business columnist for the Detroit Free Press, who last week published an update on Detroit's hotel market in which he indicated that local meetings business is improving, slowly but surely.

"Future bookings are up," Walsh says, "but that hasn't translated yet into a big influx of conventioneers or spending."

The picture is similar at Detroit-area hotels, where occupancy is up — although still relatively low.

"Just three years after being the nation's emptiest major-city hotel market with a vacancy rate of 52 percent, the metro Detroit hotel scene is showing surprising — and welcome — signs of life," Walsh says, citing Smith Travel Research data showing Detroit hotel occupancy at 59.8 percent in 2011.

Although that's up 10 percent from 2010, it's still well below major markets such as New York, Miami and San Francisco, where occupancy rates are 81 percent, 79 percent and 76 percent, respectively. "Smith's data show that Detroit's average room rate of $77.11 last year was still the lowest among the 25 largest U.S. markets," Walsh continues. "But the Motor City's hotel occupancy rate has surpassed that of five other regions — Atlanta, Dallas, Phoenix, St. Louis and Norfolk-Virginia Beach, Va."

Walsh gives credit to the auto industry. "What's driving the modest comeback at southeast Michigan's hotels is primarily a rebound in corporate business," he says. "The automobile companies and their suppliers are selling more product and posting solid profits, so the tight restrictions on travel and entertainment have relaxed somewhat."

Detroit's "modest comeback" has been enough to attract the attention of another hotel consulting firm — TravelClick — which earlier this year ranked Detroit second on its list of the "Top Five Strongest U.S. Travel Markets," behind only Charlotte, N.C., based on committed hotel bookings for 2012.

Concludes Walsh: "If Detroit is not exactly a thriving hotel market yet, at least we're putting more heads in beds, as they say in the trade."

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