Hamilton County’s lodging economy may slow slightly after 13 years of strong 4.9 percent annualized lodging demand growth, according to a forecast report commissioned by Hamilton County Tourism Inc. from Tourism Economics, an Oxford Economics Company. The new predicted annualized demand growth is 4.3 percent.
The number of available hotel rooms in the county grew almost 34 percent between 2015 and 2018. The hotel pipeline shows supply growth will increase another 18 percent by 2021.
“Our county’s hotel supply has increased dramatically over the past few years, which would tend to mean supply would outpace demand,” said Hamilton County Tourism President/CEO Brenda Myers. “But despite this growth, market demand has remained fairly strong because it’s diverse. The new slight downturn in potential growth is really expected and not worrisome.”
Tourism Economics is an international leader in research on the impact of tourism in communities. This is the second study commissioned by Hamilton County Tourism.
The forecast study also demonstrates an anecdotal shift in the market from the previous study in 2016. Leisure travelers’ stays now outnumber business traveler stays, a survey of select hotels within the market indicates.
The report also notes that the “period of heightened occupancy has ended” meaning that “occupancy has returned to the historical average.” The report does note, however, that an important performance metric for hotels remains “well-ahead” of the average: RevPAR. Revenue Per Available Room is a multiplier of a hotel’s average daily room rate by its occupancy rate, or the total revenue generated by a hotel divided by the total number of available rooms.
“Hotel rooms are essentially a commodity like wheat or corn and are impacted by supply and demand,” said Myers. “If RevPAR holds strong, that means hotels are managing their inventories well and selling them at the right price.”
The forecast report does predict RevPAR growth will enter negative territory in 2020 at -4.2 percent, stabilize in 2021 and rebound in 2022 at 4.5 percent growth, given no significant external economic impacts to the market.
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About Hamilton County Tourism
Hamilton County Tourism Inc. is a nonprofit, destination management organization that promotes tourism growth through strategic marketing, hospitality and development initiatives providing hospitality to more than four million visitors to Hamilton County each year.