You are the owner of this article.
top story

Charleston area added more than 900 hotel rooms, sold record number of nights in 2019

Hotel PRINT LEDE.JPG (copy) (copy)

For the second year in a row, Charleston-area hotels sold a record number of stays, but occupancy rates were down. The luxury Hotel Bennett (above) near Marion Square was among the newcomers. File/Andrew J. Whitaker/Staff

After hitting record numbers in 2018, Charleston-area hotels sold more overnight stays than ever for the second consecutive year, according to new figures from the College of Charleston. 

More than 4.8 million nights were sold at Charleston County hotels in 2019, the college found, an increase of 3.7 percent over the previous year. 

While recent rule changes have sought to slow what some described as an "overconcentration" of hotel rooms on the peninsula, the latest market indicators likely won't be a deterrent for developers eyeing lodging projects. 

The year's figures showed the market's ability to absorb hundreds of new rooms while maintaining strong performance numbers, said Daniel Guttentag, the director of the college's Office of Tourism Analysis. 

The region added 921 hotel rooms during 2019, a gain of about 5.3 percent, bringing the area's total inventory to more than 18,000.

Inventory gains started in January of last year with the opening of the 179-room Hotel Bennett on Marion Square. Other openings included a six-story Hyatt Place that opened in the middle of a Mount Pleasant shopping center and a 126-room Cambria Hotel in West Ashley

According to the most recent U.S. lodging update from commercial real estate firm CBRE Inc., Charleston ranked sixth in the U.S. for supply growth during the third quarter of 2019

Supply growth in Charleston outpaced demand, meaning occupancy rates went down. The same was true in Seattle, New York and Dallas. 

But while the market added more rooms in 2019 than it did the year before, the decline in occupancy was smaller. The average occupancy rate decreased by less than half a percent in 2019, while it dipped nearly 2 percent in 2018.

The rise in room nights sold is also an indicator of another important industry measure: overall annual visitors. 

Though the College of Charleston's official estimates for 2019's visitor total won't be released until the spring, Guttentag said that a jump in nights sold means a bump in the total number of tourists. 

Last year, when room nights sold increased by 2.3 percent, visitation climbed about 6 percent to reach a record 7.3 million visitors

At the statewide level, sales of hotel stays are climbing, too. Room nights sold were up by about 2 percent for the year after November, the most recent month for which statewide hotel figures are available. 

The S.C. Department of Parks, Recreation and Tourism recently started including the room nights sold figure in its monthly recap of tourism industry indicators. 

Given the recent growth in lodging inventory across the state — the travel research firm STR estimates the number of South Carolina hotel rooms has grown by 10 percent in the last five years — tourism director Duane Parrish wrote in a recent industry update that the room nights figure is a "better metric than occupancy rate for tracking growth."

We're starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us - it's free.

Still, occupancy rates can indicate how well a market is absorbing its new rooms. 

Occupancy rates in the state were down almost a full percentage point after November to 64.5 percent compared to the Charleston area's 74.5 percent. The revenue generated per available room in the state was also down.

Average occupancy rates nationwide fared better than those in South Carolina over the same period. Hotels in the U.S. filled about 67 percent of their rooms from January to November 2019.

The Charleston area still outperforms both state and nationwide averages for the amount charged per room per night. Across the U.S., average room rates are about $132 a night. For South Carolina, the average is even lower, about $119.

The average rate in the Charleston area was $148.86 night, a decrease of about 0.3 percent from 2018 figures. A decrease that small is "basically flat," Guttentag said.

"Having an ADR (average daily rate) hovering around $150 is a place that countless destinations would be eager to achieve," he said. 

Whether Charleston will continue to absorb new rooms without seeing substantial drops in rates or occupancy will be critical as more lodging projects are added to the market's pipeline.

Several hotels, including a couple boutique projects downtown and chain flags in the suburbs, are eyeing openings this year. Two of the largest projects under construction now — a 153-room hotel at the Wild Dunes Resort and a 225-room lodging next to Waterfront Park — will open in 2021 and 2022, respectively.

More hotel requests could join the queue soon. A city zoning board that reviews hotel requests is scheduled to hear from three applicants next week requesting a total of 575 new hotel rooms. 

While a strong start to the year and a weak finish would have raised concerns about a possible downward trend, the year's reports showed the opposite, Guttentag said. 

Weaker numbers came earlier in the year while the market finished 2019 strong.

In December, for example, the average rate charged per room was up by nearly 10 percent, and there were about 11 percent more nights sold in area lodgings than in the same month in 2018. 

Similarly, November's figures showed year-over-year increases for daily rates, rooms sold and occupancy.  

"Looking forward to 2020, that's a particularly reassuring trend," Guttentag said. "We seem to be entering the year with really strong momentum." 

Reach Emily Williams at 843-937-5553. Follow her on Twitter @emilye_williams.

Emily Williams is a business reporter at The Post and Courier, covering tourism and aerospace. She also writes the Business Headlines newsletter, which is published twice a week. Before moving to Charleston, her byline appeared in The Boston Globe.

Get up-to-the-minute news sent straight to your device.


Breaking News

Free Times Breaking News