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Local hospitality market continues expanding: Last year's numbers are in; this year looking strong

December 3, 2007

More visitors are coming to Indianapolis and spending more money, leading to more jobs in the local hospitality industry, a soon-to-be-released report from the Indianapolis Convention and Visitors Association shows.

And that's likely to continue, given the numbers predicted for 2007, even though the city's overall employment growth doesn't look strong.

"These numbers show a continued growth in tourism in Indianapolis," said ICVA spokesman Bob Schultz.

Tourism in Indianapolis had an economic impact of $3.6 billion last year-$31 million more than in 2005, according to a study by Maryland-based Global Insight Inc. that ICVA will release Dec. 6. That figure includes direct visitor spending and salaries for local hospitality industry workers.

The study also found that 21.9 million visitors came to Indianapolis in 2006, up about 200,000 from the previous year.

And all that growth is leading to more jobs. During 2006, the industry employed 66,621 people in Indianapolis, up 5.1 percent from 2005. Hospitality employment is projected to grow another 3.8 percent this year, compared with general jobgrowth projections of only 1.2 percent.

A local industry observer said much of the credit belongs to the ICVA because its marketing of the city is so targeted.

"They know our strengths and weaknesses," said Sotiris Avgoustis, chairman of IUPUI's Department of Tourism, Conventions and Event Management. "They don't try to sell Indianapolis as a place where any leisure group will have a good time."

Local attractions are cashing in on the increase in visitors by partnering with the ICVA on joint advertising.

The Indianapolis Zoo, for example, worked with the agency on radio spots and now is on track to have its highest attendance ever. Visits already have reached the 1.1 million record seen when the Dolphin Pavilion debuted in 2005, said Karen Burns, senior vice president for external relations. And another 60,000 visits may yet be logged in December.

"There's a growing energy in downtown," Burns said. She credits the growth to good decisions by attraction leaders and the ICVA and the community's ability to work together.

"There's the acknowledgment that there's real money in our culture," she said. "If we get [visitors] here, they'll do it all."

Given the ongoing hotel construction tied to the new Lucas Oil Stadium and the Indiana Convention Center expansion expected to open in 2010, it's easy to understand why the city's hospitality employment base is growing. But whether the employment numbers will continue to grow at the average 3.5-percent clip of recent years remains to be seen.

"That's the million-dollar question," Avgoustis said. Other cities with big expansions usually see occupancy rates decline as new rooms hit the market, which leads to dips or plateaus in employment rates, he said.

In fact, two IUPUI tourism department members are teaming up with an economics professor to study the local hotel market and track the impact of new hotel rooms on room rates.

This year's tourism numbers won't be crunched until fall 2008, but if bookings made in 2007 are a guide, the future should look good. The association helped book 542,000 hotel room nights in 2007, a 6-percent increase over nights booked in 2006.

The full study, along with ICVA's business plan for 2008, will be released at its annual State of the Tourism presentation Dec. 6 at the Indiana History Center.
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