FOLEY - The South Baldwin Chamber of Commerce brought the 2017 Leadership Series Lunch to an end on Nov. 28 with an update on tourism in South Baldwin County, focusing on hotel data. Speakers for the …
FOLEY - The South Baldwin Chamber of Commerce brought the 2017 Leadership Series Lunch to an end on Nov. 28 with an update on tourism in South Baldwin County, focusing on hotel data. Speakers for the event were Amanda Hite, the CEO and President of STR, a privately-owned company located in Nashville that specializes in data collection from hotels, and Herb Malone, CEO and President of Gulf Shores and Orange Beach Tourism.
Hite began the presentation by giving an update on South Baldwin’s hotel data as compared to Alabama’s. STR needs three numbers from a hotel to properly collect and analyze their data: the rooms available, rooms sold, and room revenue.
“With those three numbers we can calculate occupancy average, daily rate, and revenues for available rooms (known as RevPAR in the hotel business),” Hite said. “For anyone in the hotel industry, they know RevPAR is sort of what you live or die by and how you’re performing against your competitors.”
Hite stated that the hotel business has been doing well for the last six or seven years. There has been an incredible increase in demand, coming in at a 2.6 percent increase through October 2017. The supply growth is at 1.8 percent, which Hite says makes a very good supply and demand balance at this point in the cycle.
“For the amount of new development that’s coming in, the demand growth is still outpacing that, which gives us positive occupancy, positive rate growth, and positive RevPAR growth,” Hite said.
Currently in the U.S., there is a 67.6 percent occupancy rate, which Hite says is an all-time high for the hotel industry, and every month the industry is selling more rooms than ever before.
“I would say things are going to continue that way for the next few years,” Hite said. “Barring any crazy events that we can’t anticipate.”
RevPAR growth is also happening in the hotel industry, with 92 consecutive months of growth in the U.S. Hite predicted the industry would be setting a record there as well.
For South Baldwin in specific, growth has been steadily rising.
“For the state of Alabama through October of this year, $1.2 billion has been collected in hotel room revenue,” Hite said. “For Foley, Gulf Shores, and Orange Beach, their portion of that room revenue is about 7.7 percent, so that’s almost $93 million in hotel revenue that’s been collected through October of this year. That’s almost eight percent of the entire state.”
As to room nights sold, for October year-to-date, Foley has sold 147,000 room nights, while Gulf Shores and Orange Beach have sold 517,000 room nights.
“That makes up almost five percent of the state of Alabama room nights sold, happening in these three cities,” said Hite.
Baldwin County hosted 6.3 million guests during the last annual year, Malone reported on a local level. While visiting, guests spent $4.2 billion in direct spending in local businesses throughout the county. The tourism industry in South Baldwin supports 49,681 travel related jobs, such as restaurants, hotels, etc., which averages around $1.4 billion in salaries and wages.
“Despite a large amount of rain and tropical storms, by the end of May our lodging revenue was at ten percent above last year’s,” said Malone.
Lodging revenue has shown an annual rate growth in the last three years, with a significant growth of 23 percent in the fall season, 16 percent growth in winter, 12.6 percent in spring, and 5.5 percent growth in summer.
Malone presented what he called a new paradigm, which clustered months together based on their lodging revenue numbers to demonstrate the changes over the last three years. June and July came in as the year’s highest drawing months, and made up 42.3 percent of the annual total for lodging revenue. May and August were placed together due to their similar numbers, which equaled nearly 20 percent of the annual total.
“The real takeaway there is August is not the 3rd highest month anymore,” Malone said. “May is. May has outpaced August, it has been outpacing August for the last three years.”
March, April, September, and October were placed together with 27.5 percent of the year’s total. The rest of the year, November through February, made up about ten percent.
“On lodging tax revenue, Baldwin County generates right at 30 percent of the state’s annual total when you factor in all our condos and everything,” said Malone. “So we are a major force in the state.”
The hotel industry is expected to continue to grow in the future, according to Hite. With many new hotels and rooms being brought to Baldwin County or currently in planning, the numbers are predicted to increase in the area as more people visit the county.
As Malone stated in closing: “We’ve talked about some unbelievable numbers and high dollars, but this is not just a numbers industry. It’s a people industry. You take care of the people, the numbers take care of themselves.”