Business & Real Estate

Sacramento hotels, motels ring up strong numbers in 2017

Sacramento motel and hotel operators rang up strong numbers in all key categories in 2017, which local officials attributed to the area’s increasing national reputation as a leisure/business destination.

The occupancy rate at area lodgings for all of 2017 was 78.3 percent, a 5.5 percent improvement over 2016, according to the year-end report issued by CBRE Hotels in San Francisco.

Hotel and motel operators also were able to increase room rates and were making more money per room.

CBRE said the average daily room rate in Sacramento last year was $121.77, up 6.6 percent from $114.22 in 2016; revenue per available room in 2017 was $95.39, a hefty 12.5 percent surge from an average of $84.81 the prior year.

For perspective, the Sacramento area’s year-over-year percentage improvement in per-room revenue was more than twice that of the second-best region in Northern California (5.6 percent in Sonoma County). San Francisco, which had room occupancy rate of nearly 85 percent last year, actually saw a 4.2 percent decline in revenue per available room.

Hotel industry analysts say 70 percent occupancy is considered the point at which hotels can comfortably raise rates.

Mike Testa, president and CEO of Visit Sacramento, on Monday cited the flurry of popular events at Golden 1 Center, the addition of more quality hotel rooms last year and a brisk convention business as key contributors to the area’s lodgings industry.

“But beyond that,” he added, “I think you have to look at the changing narrative on Sacramento on a national level. People are seeing this city in a different way … as a destination for business, leisure and conventions.”

Testa said Visit Sacramento officials and regional leaders used to spend a lot of time “educating people about where Sacramento was and what makes it unique. We don’t have to educate anymore. We’re a known entity.”

Testa said he expects downtown activity and hotel occupancy to remain brisk, citing as one example the steady stream of top-name entertainment acts coming to Golden 1 Center.