Tourism is Up in NC

This past weekend I had a chance to attend the NC Governor’s Conference on Travel and Tourism, hosted by the Asheville CVB and what a relief to see that Travel and Tourism in NC was much better in 2010 and 2011 looks good so far.

Before I go into details about that, I did want to share with you some interesting statistics about the impact of Travel and Tourism in NC that was shared at the conference from the NC Department of Commerce‘s  Division of Travel and Tourism.

For every $1 NC spends to advertise, we get $17 back – $10.30 in new state tax revenue and $6.25 in local tax revenue. That’s great ROI, huh?
And speaking of spending, domestic travelers in NC spent $17B in 2010. That means that visitors in NC spend over $46 million a day and contribute $4.1 million per day in state and local tax revenue.

What about jobs? More than 40,000 businesses in NC directly provide products and services to travelers, which goes to support 185,000 jobs in NC. We now rank third in the nation for leisure and hospitality job growth. The sector added 26,600 jobs in the last 5 years.

North Carolina is now the sixth most visited state, behind California, Texas, Florida, New York and Pennsylvania.

And finally, visitor spending generated $947 million in state tax revenue in 2010. In fact, state tax revenue generated by tourism has grown by over 35% since 2000 and each NC household saves $390 annually in state and local taxes generated by visitor spending.

In addition to that wealth of information, it was interesting to hear research about where the hotel industry is in NC. Chad Church from STR Global did a great presentation on how the US and, more importantly, the NC hotel marketing is fairing.

In the US last year, demand was almost equal to what it was at its peak in November 2007. So, compared to 2009, demand is up 7% and occupancy is up 5.8%. However, there hasn’t been a real increase in ADR (average daily rate). That was only up 2.8%.

On a state level the trends are similar – occupancy is up, however, ADR isn’t.

At its peak, ADR was $107. It’s about $96 now. And although group demand has been lagging, there appears to be an upside for late 2011.

In NC, occupancy is up about 7.3%, supply is up 2%, demand is up 9.6% and RevPAR (Revenue Per Available Room) is up 7%. The big impact has been on the ADR. It is currently down 2%.

As it relates to demand, it is almost at its prior peak from Oct 2007 and groups accounted for 38% of that demand.

As it relates to ADR, there is a sense that it should turn positive growth this year and hopefully begin realizing a growth of 6% annually in the coming years. The question for hoteliers is whether they want to grow demand or grow ADR.

So, in NC where is growth ideal – demand is up in urban centers 12%, 8% suburban, and 9% in airport.

ADR is up 2.9% in urban, suburban and airport areas are still trailing.

ADR is starting to climb, but slow. Most are about 5% below peak levels. A good 2011 and solid 2012 and we are back to “normal”. And think about this in 2010 we saw $2.2B in room revenue, if ADR were to increase just 1%, it would generate $2.3B. So, be looking for room rates to start climbing again, even if its just by a few dollars.

The one great takeaway from this conference – things are looking up and up in NC’s Travel and Tourism. And that is something of which we can all be thankful!

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