Aug. 10, 2004 - Philadelphia-area hotels are putting more heads in beds than at any time in the last three years.

Hotel occupancy and, just as important, the average rate travelers are willing to pay for a room have gone up steadily through the first six months of the year compared with last year, and were especially strong in June, according to the most recent data available from Smith Analytics, the local division of the national Smith Travel Research firm.

The hotels' improving performance is due to a combination of new attractions in the region, lower air fares, and heavy promotion by tourism agencies and hotels themselves, which have brought more groups and more individual travelers to town, industry officials said yesterday.

For the rest of the summer, the only worry for hoteliers and the tourism promoters is whether higher gasoline prices and other factors will keep fewer people from visiting the region, officials said. About six in 10 Philadelphia visitors arrive by car, according to figures from the Greater Philadelphia Tourism Marketing Corp.

"Gas prices have not been a dominating factor" affecting leisure trips to the region so far this year, said Meryl Levitz, president of the marketing agency. "But it may be a dominating factor in the last half of the summer. ... I think people are feeling a little shaky right now about the economy, terrorism warnings and gas prices."

David Newhart, president of the Greater Philadelphia Hotel Association and general manager of the Hilton Inn at Penn at 34th and Walnut Streets, said occupancy for the year for all hotels is expected to be about 69 percent, compared with 66 percent in both 2002 and 2003.

Occupancy across the region was 66 percent in the first half of the year but climbed steadily in the spring and hit 77 percent in June, according to Smith Travel, a Tennessee firm that surveys hotels across the country.

In Center City, where about a quarter of the region's hotel rooms are situated, occupancy was 69 percent through the first six months and 82 percent in June, the research firm said.

Starting in late 2000, hotels in Philadelphia were hammered by a softening economy and a sharp increase in the number of rooms available. The supply of rooms in Center City went from 6,700 rooms in 1997 to 10,500 three years later as new hotels opened in preparation for the Republican National Convention.

The other key factor in measuring hotels' financial performance, the average daily rate they are able to charge, has also been improving, according to Smith Travel. The rate for the region so far this year has averaged $95 a night, 2.5 percent more than the first six months of 2003. In Center City, hotels have charged an average rate of $130 a night this year, 3.4 percent more than last year.

"The rate is soft compared to a few years ago, but it's starting to trend up," Newhart said.

Tourism officials noted that at least five factors are helping boost Philadelphia's hospitality business this year:

--New low-fare airline service and lower fares by all carriers.

--Attractions on Independence Mall that are drawing large crowds.

--New restaurants.

--Ongoing domestic and international tourism advertising campaigns.

--Vigorous sales staffs at hotels.

"All the effort is being coordinated. It's in sync," said Sam Rogers, vice president for tourism for the Philadelphia Convention and Visitors Bureau, which sells to groups that hold conventions and to international travelers. "It's a mix of the economy is good, and the promotion has been there."

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