Banking & Finance, Economic Development, and Travel & Tourism

Hotels earn record revenue

Leisure travel, convention and sports group attendance, healthy economy among reasons cited for increase.

February 8, 2019
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Kent County hotels hosted a record-breaking number of people for the ninth consecutive year.

From 2017 to 2018, hotel room revenue increased by 2.1 percent to $216 million, according to Experience Grand Rapids, Kent County’s tourism marketing arm.

The organization attributes this to multiple factors: leisure travel, convention and sports group attendance, a healthy local business economy and the ongoing efforts of its sales and marketing teams to attract more conventions, groups and other visitors.

Experience Grand Rapids staff is preparing for an additional 1,300 area hotel rooms in the next couple years, according to Doug Small, Experience Grand Rapids president.

How a large influx of rooms will impact year-end numbers remains to be seen, Small said.

While occupancy rates are mentioned a lot in the tourism industry, he said the real measure of success is hotel revenue. Ensuring increased revenue comes from more than focusing on occupancy alone but also depends on keeping room rates from dropping.

The organization’s job requires a strategy that involves driving business at market rates and not doing so by undercharging. That’s also important for these new hotels, which can cost tens of millions of dollars and need strong rates to pay the bills.

“This destination for too many years was undervalued,” Small said.

People were staying at four-diamond hotels for two-diamond pricing. Rates have finally gotten to a competitive point, though competing cities still charge more, he said.

He noted Experience Grand Rapids has no say in whether or not private developers can build hotels. If that’s what they decide and the county approves it, it’s his job to make them successful.

“And we will do just that,” he said.

“Anytime you get a large influx of at one time, you’ve got to work that much harder and try to market, promote, bring groups and individual travelers to your community.”

However, Small said does not expect immediate success in the first year or two new hotels are open. Attracting conventions — which bring in hundreds of visitors — is a key part of the organization’s work, and those events are typically booked three or four years in advance.

“But that doesn't mean that we can’t attract some immediate smaller group business and the leisure traveler, which is where most of our growth has been,” Small said.

If the economy takes a dip in 2020, as many economists are expecting, he said it will be difficult to continue occupancy rate growth, all the more reason to continuously improve marketing.

The sales team is working with local residents to help bring conventions and meetings to the area through the organization’s “Bring It to GR” campaign.

That means promoting the area as an energetic place full of amenities, worth spending a bit more for the experience.

Small said the organization will continue focusing on the area’s main pillars, the strengths competitors can’t match. That includes the art and culture scene, increasingly popular outdoor activities in Grand Rapids and the nearby lakeshore, the food scene and craft beverages — not just breweries but also distilleries and coffee.

They plan to continue working with the West Michigan Sports Commission, a partnership Small said has increased visitor traffic through amateur sporting events.

There are two large tourism industry tradeshows planned for 2019, Connect Faith and Going on Faith, which Small said allows his team to present Grand Rapids to thousands of meeting planners they hope bring future groups to the area.

"Grand Rapids is now being recognized by the meetings, convention and youth sports markets as a destination that competes with cities twice its size,” he said.

To help nurture craft beer tourism, the organization launched the Beer City Brewsader Passport in October 2015, a way for people to document their visits to area breweries.

To date, more than 13,000 “Brewsaders” have recorded visiting at least eight breweries and have earned an official Brewsader T-shirt. Totaling more than 110,000 brewery visits recorded by users, 41 percent of the visitors are from outside the state, including more than 250 people from other countries.

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