Hotels feeling travel slump: City occupany rates fall, but downtown operators performing well this year thanks to convention biz

August 4, 2008

Staggeringly high gasoline prices and a sputtering economy are preventing scores of would-be travelers from packing up their thirsty sport-utility vehicles and heading to their favorite vacation destinations.

Nationwide, hotel occupancy rates slipped to 68 percent through June of this year, down from 71 percent the same time last year, according to the most recent data from Tennessee-based Smith Travel Research.

For the most part, local hotel operators are feeling the same pain. Through the first six months of the year, occupancy rates in Indianapolis are 3.8 percent lower than the same time last year and down 8 percent in June.

Bolstered by convention attendance, however, downtown occupancy rates are faring better-up 2 percent through the first six months of the year and down only 0.1 percent in June, according to Smith Travel.

Even so, some downtown hotels are beginning to feel the weight of the sluggish summer. They're doing what they can to lure guests.

The Omni Severin Hotel is offering a package through Labor Day weekend highlighted by a room rate of $89-a $40 discount off its cheapest room. The rate is available on Fridays and Saturdays only and is geared toward families. Complimentary tickets to various downtown attractions are included, based on availability, and children receive a free breakfast and Disney DVD movie, among other treats.

On the Saturday of Labor Day weekend, the hotel will close an upper floor so families taking advantage of the promo- tion can watch the downtown fireworks, said Chris Ratay, the Omni's director of sales and marketing.

"The main reason [for the discount] was because of the economy," he said. "We're offering so much to the kids that it creates a memorable experience for them. It doesn't have to be in Cancun."

The city's most expensive inn, Conrad Indianapolis, is promoting what it calls a summer getaway package.

Its cheapest room typically runs $279 nightly. But for $100 less, visitors also get a continental breakfast for two and valet parking for one vehicle. Better than that, teachers can stay for $109 a night.

Competitors such as the Canterbury Hotel, whose standard room runs $169, are sitting tight, however.

"We pretty much hold onto our rates and try not to discount much," its general manager, Mark McClure, said. "We feel we're worth the price we're offering."

Hospitality officials credit a strong convention business for keeping downtown occupancy rates fairly strong. Meetings typically are booked at least three years in advance, giving hotels a steady stream of revenue.

One of the largest conventions, Gen Con LLC, will be held Aug. 14-17 and draws 25,000 visitors to the city and $25.2 million in spending. More than 16,000 hotel-room nights are reserved.

"That's why downtown is still holding its own," Jesse Ghumm, general manager for the Hampton Inn, said of the conventions.

He occasionally might partner with the Indianapolis Zoo and offer guests a special package on a night's stay and tickets. Promotions may become more prevalent starting next year, he acknowledged, during construction of the $275 million expansion of the Indiana Convention Center, a project that will cause convention business to swoon temporarily.

Discounts at the Westin so far have been limited to what the hotel promoted as "Penny Parking," in which visitors were treated to free parking in May and June. General Manager Dale McCarty is uncertain whether the "trial" will return.

"It's not looking as bad as what you hear out there," he said. "Let's put it that way."

The ICVA won't have city tourism numbers available until the end of the year, but so far, association spokesman Bob Schultz said he is not aware of a "dramatic" drop in numbers.

High gas prices have led the ICVA to participate in a statewide marketing effort with the Indiana Office of Tourism Development to encourage Hoosiers to vacation close to home. It and 18 fellow convention and visitor bureaus, as well as destinations such as Holiday World, French Lick Springs Resort and Winona Lake, have contributed funds to the promotion as well.

State Tourism Director Amy Vaughan is hopeful the campaign can give Indiana's attractions a boost in attendance.

"We're cautiously optimistic," she said. "It would be logical to think that people will be interested in staying closer to home."

Lynn Lucas, executive director of the Columbus Area Visitors Center, can attest to that. The city south of Indianapolis known for its architecture is contending not only with gas prices but the aftermath of June flooding. The flood caused extensive damage to its hospital, which remains closed.

The visitor's center is still open, however, and architectural tours of the city that were stopped for just a few days have resumed.

Lucas spent an additional $4,000 on statewide radio spots to get the word out that the city is welcoming visitors.

"We're basically saying we're still here," she said.

Any dip in the number of visitors to Columbus in June should be bolstered by its hosting of the U.S. Specialty Sports Association boys baseball and girls fastpitch softball world series. The demand for rooms by teams led some to seek hotels outside Bartholomew County, Lucas said.

Nationally, hotel owners in hot spots such as Las Vegas, Orlando and southern California are also resorting to promotions, discounting and special pricing.

The Costa Mesa Conference & Visitor Bureau in Orange County, for instance, is using $25 dining coupons and $25 gas checks to lure tourists. Three-night stays are rewarded with a $50 gas credit.
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