Area hoteliers face a challenging year

May 16, 2009
| By Pete Daly |
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Business was down at Kent County hotels in the first quarter, but hoteliers have hope that tourism promotions at the state and local levels are going to help West Michigan beat the dour predictions for 2009.

Brian Behler, the 2009 president of the Kent County Lodging Association, noted that 2008 was a rough year and the first quarter of 2009 "was definitely down," compared to the same period a year ago, but he said he's already seeing some reservations at his hotel that may be attributed to a new promotion by the Grand Rapids/Kent County Convention & Visitors Bureau. Behler is director of rooms at the JW Marriott in downtown Grand Rapids.

Hotels in general are "holding our own in the West Michigan area," said Behler. "However, with the loss of some business transients (traffic) and the leisure market also being down, it made for a difficult year" last year.

Behler said the 2009 hotel business is also expected to be down all across the nation, but he noted that the local convention and visitors bureau has "a great promotion" for two-night stays by tourists in Grand Rapids, starting right after Memorial Day and continuing through the summer season.

According to Janet Korn, vice president of marketing at the CVB, statistics collected by Smith Travel Research indicate that the occupancy rate at 50 properties in Kent County in the first quarter was down 1.5 percent, compared to the same quarter last year. The revpar, or revenue per available room, was down 4 percent.

A decline in revpar indicates that hotels are being forced to offer discounts off the regular room rates in order to fill rooms.

The research indicates that revpar for the month of March alone was down 6.3 percent, compared to March of 2008, said Korn.

The Michigan economy is obviously suffering severely, and that means West Michigan, too — but the hotel business here may actually be taking less of a hit in 2009, in comparison to the drop in hotel business in other parts of the country and the nation in general.

Smith Travel Research indicates the West Michigan area had a March occupancy rate of 43 percent, compared to 47 percent in the Milwaukee area and 55 percent in the U.S. in general. But the Smith data shows that the percentage drop in occupancy here was 4.4 percent in March, compared to March 2008, while that percentage drop in Milwaukee and the U.S. was 14.8 and 11.6 percent, respectively.

The average daily room rate (ADR) in West Michigan in March was $76.89, down 3.2 percent. In Milwaukee it was $84.75, down 3.6 percent; in the U.S. the ADR was $99.42, down 9.6 percent.

March revpar in West Michigan was $33.07, down 7.4 percent. In Milwaukee it was $39.88, down 17.8 percent; and in the U.S. it was $54.93, down 20 percent from a year ago.

Korn noted that overall revenue for stays in the 6,192 Kent County hotel rooms in the first quarter was almost $22 million, and "that's pretty big business here."

"And that's just the hotel rooms," added Korn. "People eat, and they shop, and they buy things" while they are in Grand Rapids.

"That's why it's important that we continue to market Grand Rapids as a place to visit and a place to stay over night, and why we're encouraging people" to plan their conventions and business meetings here.

"I'm optimistic that Travel Michigan's investment in the nationwide marketing campaign will help us yield the best possible return on tourism this summer," added Korn.

Travel Michigan, an arm of the state government, launched a $10 million "Pure Michigan" nationwide television advertising campaign at the end of March, on a variety of cable television channels. Some of the ads feature the voice of actor and Michigan native Tim Allen.

The Michigan Lodging and Tourism Association conducted a survey that indicates hits on the Travel Michigan website (Michigan.org) have increased dramatically since "Pure Michigan" was launched, with site visits up 16 percent and page views up 30 percent, compared to the same period last year.

According to Steven Yencich, president of the Michigan Lodging and Tourism Association, hits on the website coming from Tennessee were up 119 percent, in the month after the ad campaign began, compared to the same period last year. Hits from other states targeted by the ad campaign, including Missouri, North Carolina and Kentucky, were also up by more than 100 percent.

Korn said the "huge increase" in traffic on the Michigan.org website by people interested in Michigan vacations is "a sign they are shopping."

The Grand Rapids/Kent County CVB is also spending several hundred thousand dollars this year on its own campaign, called Feel the Beat, aimed at driving traffic to Kent County hotels.

Feel the Beat offers a free iPod Shuffle to people booking two or more consecutive nights at a participating Grand Rapids hotel starting in late May.

The CVB also collected podcasts from more than 20 restaurants, night spots and tourist attractions that can be downloaded on the iPod Shuffle. The podcasts are local information and sales pitches that tourists may find useful while staying in Grand Rapids.

About 20 hotels are participating with package deals in the Feel the Beat promotion.

Korn said the hotel packages aren't available until May 29 "but hotels are already taking reservations."

The CVB has also "gone social," with a tab on its visitgrandrapids.org website that uses Twitter to help get the word out to potential visitors to Grand Rapids.

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