Denver's hotels are filling back up, but far from full
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Visitors are returning to downtown Denver hotels, but occupancy rates still lag compared with pre-pandemic levels. Now, the state is stepping in to help.
Driving the news: On Tuesday, Colorado's tourism office released additional guidelines around a new business rebate program launching July 1 to help hotels rebound.
- The program, a product of a recent state bill, offers incentives to businesses that host meetings, conferences and events in Colorado between July 1 and Dec. 31, 2022.
- 10% cash rebates between $3,500 and $100,000 are eligible for certain events, including those that generate at least 25 paid overnight stays at a hotel and can demonstrate a "significant economic benefit" to the community in which it's held.
Why it matters: Downtown boosters tell Axios that Denver's recovery relies on tourism with bustling hotel lobbies, a busy convention center and a thriving 16th Street Mall.
By the numbers: Denver hotels' occupancy rates are only about 80% of where they were in 2019, according to a global hospitality benchmarking firm STR.
- Average daily rates remain down by about 25%, STR data shows.
- In May, downtown experienced only 56% of traffic during the same month in 2019, according to the most recent data from the Downtown Denver Partnership.
Between the lines: The numbers might tell a different story if hotels weren’t already hurting as a nationwide worker shortage hamstrings the hospitality industry.
- "Hotels have had to stop taking reservations when they still have rooms because they know they don't have the ability to service them," Colorado Hotel and Lodging Association CEO Amie Mayhew told Axios.
Yes, but: Mayhew, who lobbied for the state incentive program, says "lots of things are happening behind the scenes" to ensure the hotel industry is well-equipped to accommodate the visitors, despite being short-staffed.
Zoom out: According to STR, Denver's hotel occupancy ranks 49th among other top tourism markets researched. The top five spots included:
- Florida Keys (92%); Gatlinburg/Pigeon Forge, Tennessee (91%); Myrtle Beach, South Carolina (88.3%); Colorado Springs (88%); and Kauai Islands, Hawaii (84%).
The bottom line: As bigger corporations bring people back into work and lift their travel restrictions in conjunction with an uptick in events and a return to normalcy, hotels occupancy is expected to ramp up — but it's going to take time.
- "2021 and 2022 will still be transition years," Richard Scharf, the president and CEO of Visit Denver, tells Axios. "It’ll be an interesting couple of years."