Tampa Bay area hotels slashing rates to fill rooms

You've heard about the jobless recovery. Hotels in Tampa Bay are struggling through the discount recovery.

Coming out of a disastrous 2009, hotels are filling more rooms but only by slashing prices. For the first six months of the year, the average daily room rate in Tampa and St. Petersburg tumbled to $97.98 — down nearly 11 percent from a year earlier, according to Smith Travel Research.

"Last year was the (economic) crash year when all the business went away," said Gregg Nicklaus, an owner of the Sirata Beach Resort in St. Pete Beach. "This was projected to be the real recovery. Then it gets worse."

Bad luck, tight-fisted consumers and cut-throat competition combined to drive down rates even as the number of customers ticked up slightly from last year.

The area shivered through one of its coldest winters on record. A strong April ended with tourists wondering if oil from BP's gulf spill would touch Pinellas beaches. Storms made the July Fourth weekend a washout.

Tourists hear on the news that hotels are hurting and expect breaks on room prices and perks such as free breakfast and parking. "We're down now, and they take advantage," Nicklaus said. "They come in with a checklist."

Hotels watch daily how much competitors charge. Managers constantly balance getting the highest possible rate with the risk of being stuck with empty rooms.

"In July, occupancy has been similar or a little up from last year," said Susan Haslem, assistant manager at Thunderbird Beach Resort and two other Treasure Island properties. "But the rates are down."

New condos have snatched away customers from the no-frills Tahitian Beach Resort, she said, by dropping their prices to a level just above the motel's, she said.

The decline in local hotel rates looks worse because of a spike in prices for the 2009 Super Bowl in Tampa, said Chad Church, manager of industry research for Smith Travel. Without that, the drop in the average daily rate would be 7.5 percent — still higher than declines at hotels nationwide (2 percent) and in Florida overall (3.2 percent).

Rates rose slightly nationwide for June, the first monthly increase since September 2008. Florida properties are making "baby steps" toward returning to prerecession rate and occupancy gains, Church told hotel managers at a forecasting conference Thursday presented by the Hillsborough County Hotel and Motel Association.

"It's starting to make a turn," Church said. "But there are too many economic uncertainties to say it's going to be gangbusters in 2011."

Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.