Price is right? Downtown OKC hotels asking higher rates as demand increasesby Brian Brus
The Journal Record
11/21/2006

Journal Record Photo
OKLAHOMA CITY – Downtown Oklahoma City hotels are quickly approaching a room density necessary to regularly attract large events and are priced accordingly to increased demand, industry representatives said.


“The hotel business is solely driven by demand and supply,” said Jeff Penner, executive director of the Greater Oklahoma City Metro Hotel Association. “I don’t really have a lot of comment about pricing because it’s what the market will bear. And you’ll find that to be true in any city.

“Oklahoma City is definitely a city on the move,” he said. “And if hotel rates seem higher than what you’d expect, I can only attribute it to, one, the demand is there. Two, you’ve got a dynamic mayor and proactive City Council; you’ve got Bricktown and the river and a lot of positive going.”

The four downtown hotels already open – the Renaissance, Courtyard by Marriott, Sheraton and Colcord – comprise about 1,000 rooms, with the Skirvin Hilton’s upcoming opening expected to boost that total by about 225.

Penner said he thinks the city is securing as many tourism events as it can, based on those numbers.

“We’re on target, and I see the situation getting better as we have more rooms downtown,” he said. The general rule for convention support is about 1,400 to 1,600 rooms within walking distance to event sites, Penner said. “We’re certainly moving in that direction.”

Low rates for those rooms range from $149 a night for a king-size bed on Friday and Saturday nights to $249. Reservation clerks and sales managers said prices can vary depending on room availability due to popular area events; one clerk said her company’s database of prices hadn’t been updated yet for the new calendar year, so rates were defaulting to a higher value.

Penner was reluctant to talk about room rates or specific hotel pricing structures or negotiations.

“When you’ve got a $30 million building, it’s got one gigantic mortgage payment,” he said. “Businesses will operate as businesses. They will get the prices they need to cover their margins.”

Barb Denny, interim director for the Oklahoma City Convention & Visitors Bureau, agreed that room rates are reflecting demand and seem to be justified.

“It hinges on so many things. Yes, room rates are a component of that,” Denny said. “A lot of conventions also look to opportunities to do things within walking distance. Access to transportation becomes a factor, as do food opportunities. People tend to focus on hotel rates.”

About a year ago, Oklahoma City lost a bid to host the nation’s seventh-largest conference, the American Legion National Convention. The group instead chose Milwaukee for its 2010 event, at an estimated economic impact of $40 million.

Event organizers said they were unwilling to accept Oklahoma City’s downtown hotel room rates; the American Legion was seeking rooms at about $100 per night. Officials at the time said local hotels wouldn’t negotiate.

Denny said the bureau has no authority to even suggest that hotels modify their rental rates.

“We are a conduit to gather information to put the lead before the hotel community. … We promote the opportunity to host a convention,” she said. “They have to look at how this aligns with their bookings.”

And Oklahoma City’s profile continues to evolve, Denny said, which means “you start looking at what markets best suit what we have to offer at this point in time.”

“While we maybe used to be very attractive to a particular market in the industry, that may be shifting now as our product develops,” she said. “It may be that we focus on attracting different markets than try to change someone’s mind about their business plan.”

The bureau’s latest report to Oklahoma City Council for the 2005-2006 fiscal year showed an overall increase in rented room nights, 312,037 compared with the previous year of 289,643, or about 109 percent.
However, the 2004-2005 fiscal year had been down slightly from 2003-2004 when the city’s hotels rented 293,661 room nights.

The 2005-2006 fiscal year also delivered an economic impact of $393 million, the bureau reported, better than the previous year of $330 million, but not quite up to 2003-2004’s economic impact of $472 million.
Major upcoming convention bookings include Pre-Paid Legal Services Inc. in March 2007 with 9,270 room nights, Sonic Corp. in September 2007 with 6,137 room nights, Oklahoma Coaches Association in July 2008 with 2,665 room nights, and the Amateur Softball Association in November 2008 with 3,305 room nights.
When asked to describe the tourism events that are matching Oklahoma City’s downtown hotel rates, Penner said they were “high quality.” “And if you look at March of 2007, you’ll see what’s going to probably be the record-breaking month in Oklahoma City for the hospitality industry,” he said, referring to the Big 12 Conference college basketball tournament.