If further proof is needed that Utah is coming out of the economic doldrums, it comes from a report this week that hotels in the Salt Lake Valley chalked up the highest percent of occupancy and the highest average room rates in 1988 of the major cities in the Rocky Mountain states.

International accounting firm Pannell Kerr Forster (PKF) annually documents trends in the hotel industry and monitors 4,500 hotel rooms in Utah of the state's total 11,000. According to Bob Benton of PKF's Denver office, Salt Lake's percent of occupancy last year was 69.1 percent and the average room rate was $54.14.That compares with an average occupancy of only 57 percent and a $50.50 average room rate for the region PKF monitors, which includes Utah, Colorado, Wyoming, Montana and New Mexico.

Denver's occupancy during 1988, for example, was only 54.7 percent - 15 points below Salt Lake - and its average room rate was $54.78. Albuquerque was 61.8 percent and $49.34; Billings was 50.6 percent and $40.96 and the state of Wyoming (no city figures kept) was 54.4 percent and $38.68.

Statewide, Utah's numbers drop somewhat to 66.3 percent and $50.70.

Salt Lake's 1988 figures of 69.1 percent occupancy and $54.14 average room rate are up from 67.1 percent and $53.82 in 1987 and 62.4 percent and $52.60 in 1986 - a clear upward trend over the past three years.

"Salt Lake is obviously substantially stronger than the rest of the region," said Benton. "These numbers put you (Salt Lake) at the top of the heap."

Rick Davis, president of the Salt Lake Convention and Visitors Bureau, said the local hotel industry is even stronger than PKF's numbers indicate because the 4,500 rooms monitored by the accounting firm don't include some of the major downtown hotels, which have been turning in strong numbers.

He said 1988 sales and room tax collections were 22 percent higher than 1987, reflecting significant increases in both occupancy and room rates. That translates into other economic benefits, he said, because it means more people are coming in and spending money at businesses other than hotels.

Part of the increase in occupancy in 1988 can be attributed to the closing of the Hotel Utah in August 1987, but that was partially offset by the addition of 220 rooms at the University Park Hotel in Research Park, which Davis said has "been doing very well."

The main reason for the Salt Lake increases, said Davis, is the record year for conventions the city enjoyed in 1988, higher than any previous year. More than 200,000 convention attendees came to the city, and most of them stayed in downtown or airport hotels.

The second factor in the growing health of the hotel industry, he said, is the increase in leisure travelers, both summer tourists and skiers. "We had a really good tourist season in June, July and August, especially for international visitors," said Davis.

"And we had an extraordinarily good ski season in February and March of last year. Many people don't realize that 26 percent of destination skiers stay in downtown hotels."

The third reason for the good year, said Davis, is the overall resurgence in the local economy. "Forty to 50 percent of total room sales in our hotels are to business travelers. Our economy is on a slow upswing after several bad years, and when that happens it helps everything."

Does this all mean we can expect more hotels to be built soon? Davis doesn't think so.

"We won't see more hotels coming in until our occupancies and room rates increase even more, to the high 70s and low 80s in occupancy and when average room rates are closer to the $75-$80 range. Then it will make sense for developers to think about new construction."

He said low room rates have been a bigger problem for hotel owners than have occupancy rates. "Our hotels are now recognizing that their competition is Denver, Phoenix, Las Vegas and Reno, not the guy next door or across the street."