Local Hotels Seeing Less Summer Business Than 10 Years Ago

Friday, November 19, 2010

Visitors during the summer months are what keep local hotels afloat. Overnight hotel stays during these peak months have dropped dramatically over the last 10 years, according to a new collection of data.

According to WHMA Director of Operations Priscilla Caldwell, there has been “a critical tourism deficit is concentrated in the summer months,” based on the new collection of summer data. This indicates “a systemic tourism problem with the consistent downward drop in overall demand over the past ten years.

“The dearth in the summer tourism industry here has an impact industry-wide with occupancy the lowest in decades. A tremendous drop in occupancy occurred from 2000-2010, affecting rate, which in turn decreases the revenue per available room and overall decreasing total revenues.”

According to the new data compilation, weekend occupancy has dropped by 10 percentage points, roughly, between 2000 and 2010, from 83 to 79 percent on Friday and from 87 to 82 percent on Saturday. Weekday occupancy in the summer over the same time span has dropped even more significantly every day except Sunday, with Monday and Tuesday falling the most. This might suggest tourists are not staying as long when they come for a weekend visit.

Compared to 10 years ago, rates in 2010 are lower – during weekdays, they’re roughly $10 lower, and weekends, only a few dollars lower.

Because occupancy and rates are lower, the revenues a hotel makes per each available room are significantly lower (since there are fewer people staying in cheaper rooms). The biggest drop in revenue per available room was on Tuesdays during the summer months, which fell from an average of $73 in 2000 to $49 in 2010.

Timeshares may have played a big part in the decline in occupancy in hotels over the past decade or more. A recent report commissioned by the Greater Williamsburg Chamber and Tourism Alliance found that since 1987, occupied rooms in timeshares (including purchased rooms and those rented nightly like a hotel) have increased over 372 percent, while occupied hotel rooms have decreased 9.6 percent (with the largest drop in the years between 2007 and the present).

Almost one out of every two rooms currently occupied in the area is in a timeshare, according to the report.

Caldwell says the summer is important “because it is the best opportunity to push demand among the buying public… the summer is when our target audience of young families plans to spend most of their travel money… staying the longest, buying more consumables.

“Therefore, this deficit in the high season exponentially affects the region and its detrimental effects are felt throughout the year.

“Summer is the tourism main event for families and for our family destination. While it is important to look at the shoulder months, the tourism industry must assess the decreasing performance in the summer, and the effect it has on our communities.”