Even a Room With No View Is Booked Solid

Travel boom means more 'no vacancy' signs and higher hotel prices this holiday season.

The way hotel manager Tom Grippi explains it, the key word is overflow.

Mr. Grippi's Ramada Hotel in suburban New York City ran a packed 90 percent occupancy rate over Thanksgiving weekend - capturing the business overflow from sold-out hotels in pricey Manhattan, 25 miles away.

Grippi and other hoteliers whose inns are bursting at the seams no doubt are thankful for this year's abundance of travelers and tourists. But for the traveling public, the hotel crunch means something else: If you don't want to sleep on that sagging twin bed in your Aunt Edna's guest room, make hotel reservations early and be prepared to pay more.

Indeed, the nation's hotel rooms are increasingly filled with Americans who, in these economic good times, are taking more trips than usual. As demand for rooms intensifies and hotel construction lags, prices are rising - portending a banner year for the hotel industry.

"Profits for the hotel industry will be at record levels this year," says John Fox of Pannell Kerr Forster, a hotel consultancy group based in New York. Nationally, the average cost of a hotel room rose from $69.66 in 1996 to $74.96 at the end of September.

The room shortage exists in destination cities such as San Francisco and Boston, as well as in regional hot spots such as Santa Fe, N.M., the Mississippi coastline, and the Twin Cities.

Kelly Wilson, manager of the Marina Inn in San Francisco's hip Marina district, says she spent much of this past holiday weekend turning away weary tourists frustrated by the city's tight hotel market. "People come in here after wandering the streets for most of the day looking for a room. They're frustrated," says Ms. Wilson, whose English country inn offers rooms at roughly $75. "What can I tell them? When there is something big happening here, there just aren't enough rooms."

In Whitefish, Mont., Nancy Miller, assistant manager of the Good Medicine Lodge, received a spate of phone calls from prospective guests wanting to stay at the inn over Thanksgiving - but it doesn't reopen until early December. "We're turning people away. We've never done that before," says Ms. Miller, whose cabin stands near the mountains of Glacier National Park.

Explanations for the upturn in business and leisure travel revolve around a generally healthy economy. But lack of hotel construction during much of the 1980s is equally responsible for the tight squeeze between supply and demand, experts say.

Coming out of the recession of the early 1990s, hotel chains and developers were reluctant to jump back into the construction game. A sour economy combined with the sobering effects of the Gulf War created few incentives for travel, or for building hotels. Only in the past year or two, with the country riding six years of economic growth, have hotel proposals moved with much speed into the building stage.

"We're probably at the peak of demand, so the attention now is on new projects," says Marni Dacy of the American Hotel and Motel Association in Washington.

Some two dozen hotel projects are planned for Boston and another 18 in New York City. Miami Beach is poised for new development: Loews Hotels is building an 800-room complex in a partnership with the city. In Biloxi, along Mississippi's coast, two new casinos are ready to open early next year, bringing with them another 3,000 rooms that are expected to open by late 1998.

"People, especially families, are just traveling more," says Linda Hornsby of the Gulf Coast Hotel-Motel Association of Mississippi, which represents hotels along 26 miles of white sand beaches. The total number of rooms in Biloxi and surrounding towns has ballooned from 6,400 in 1992 to more than 10,700.

Wayne Mainus, innkeeper at the El Farolito Bed & Breakfast in Santa Fe, sighs with relief when he exclaims that occupancy is double what it was a year ago. "There are more things happening here all year round," he says. Hotel occupancy in this region of snowy mountains has grown from 75 percent in 1996 to a projected 80.8 percent this year. The price of an average room has gone up as well: $117.21 in 1996 versus $121.18 for 1997.

But there's not a dearth of accommodations everywhere. In Seattle, a host of hotel projects are due to get under way. Boise, Idaho, too, may be facing a glut of hotel space.

For Bill Howard of the Atlanta Convention and Visitors Bureau, all the talk of sky-high occupancy rates and building projects is worrisome. A man who helped oversee the massive construction leading up to the 1996 Olympics, Mr. Howard notes that the hotel industry historically moves in seven-year boom-bust cycles. Atlanta, he says, is still catching up with a building surge that lifted the number of rooms from 56,000 to 70,000.

For the near term, though, travel is likely to remain heavy, sending customers scurrying for any room they can find - especially in popular New York.

Sitting in a high-backed cushioned chair in the packed lobby of the New York Hilton, Leticia Gavito of Brownsville, Texas, tells how she followed her instincts and made Thanksgiving hotel reservations early. "I just knew it would be smart to book something far in advance," says Ms. Gavito. "People like to travel to New York these days, no matter what they have to do to get here."

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