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85% of Sonoma hotels filled in August; but group sees slower ’09

NORTH BAY – Sonoma was the only North Bay county to increase hotel occupancy rates year over year in August, according to a new travel study released earlier this month.

Nonetheless, the positive trend may fade as new hotel rooms come on line combined with a projected drop in demand in 2009.

The PKF Consulting quarterly report called “U.S. Hotels to Bottom out in 2009” said demand and occupancy will dwindle nationally through the end of next year, but some North Bay numbers are already showing signs of a slowdown.

Marin County was the only region not to lose occupancy in the first eight months of this year, stabilizing its rate at 78.8 percent. Sonoma County occupancy rates decreased by about 2.2 percent in the first eight months of this year, compared to a decrease of 0.4 percent in Napa.

Sonoma increased its occupancy rate year over year for the month of August, reporting a rate of 85.5 percent, which is 1.2 percent higher than the same month last year. Marin recorded the highest drop in occupancy year over year, reporting rates of about 83.8 percent in August, compared to 87.6 percent the same time last year. Napa had the highest occupancy rate in August at 86.1 percent but still recorded a decrease year over year of about 2.7 percent.

The study blamed the economy and declining airline capacity for less travel. An increasing supply of hotels will also exacerbate the problem, according to the report.

Nationally, the supply of hotel rooms is expected to jump about 6.2 percent in 2008 and 2009. The two Wine Country counties are both undergoing a flurry of hotel projects that will add an estimated 2,500 new rooms to the region in the next few years.

An earlier tourism report released this summer by the Sonoma County Tourism Bureau and Economic Development Board with information from Moody’s Economy.com and Smith Travel Research described similar risks. But the study also said the county could make up some of the shortfall with increased traffic from the Charles M. Schulz-Sonoma County Airport. Also, the average North Bay tourists are in higher than average income brackets and are less vulnerable to downturns in the economy.

Other indicators in the PKF study found Sonoma was also the only county to decrease average daily room rates year over year, reporting an average $154.65 a night, down from $155.94 in 2007. Marin and Napa both increased average rates, with prices at $183.49 and $204.11, respectively.

Sonoma was also the only region to reduce average daily room rates in the first eight months of this year, dropping the average price by about 1.1 percent compared with increases in Napa and Marin of 2.3 percent and 3.9 percent, respectively.