R.I. lodging, restaurants continue to see modest growth in 2013
FROM LEFT TO RIGHT: Angelo De Peri, R.I. Hospitality Association board chairman; Rachel J. Roginsky, principal of the Pinnacle Advisory Group; Dale J. Venturini, R.I. Hospitality Association president and CEO; and B. Hudson Riehle, senior vice president of the Research and Knowledge Group.
PROVIDENCE – Slow, modest growth characterized the past year in the Rhode Island lodging and restaurant industries, and more of the same is forecast for 2014, according to experts speaking at the Rhode Island Hospitality Association’s 10th annual Economic Outlook Breakfast.
The event was held Thursday morning at the Rhode Island Convention Center.
“I wake up every morning optimistic and my optimism is proven,” said Dale J. Venturini, president and CEO of the Cranston-based association. “We have growth. It’s slow, but it’s continuing.”
The restaurant industry nationwide is poised to register its fourth consecutive year of real sales growth in 2013, though it is more modest compared with how the industry has performed historically, said B. Hudson Riehle, senior vice president for the Research and Knowledge Group at the Washington, D.C.-based National Restaurant Association.
Total food sales for the country are projected to reach a record high of $660 billion by the end of this year, a 3.8 increase over last year, he said. But, adjusted for inflation, that growth comes in at only 0.8 percent, down slightly compared with last year, and flat overall, he said – a challenge for the industry.
Restaurant sales growth for Rhode Island is projected for the full year of 2013 at 2.5 percent, one of the lowest rates in the country, he said. However, restaurant employment growth over the next two decades is projected at 6.5 percent – healthier than some states but worse than others.
While Rhode Island largely mirrors the country, broadly speaking, Riehle said, the state is projected to remain stable in population growth, which he puts at 0.2 percent, and will see improvement in disposal income, from 0.8 percent this year to 2 percent in 2014. Broadly, the western and southern states have experienced the greatest population growth, he said.
“It’s a mixed bag,” admitted Bahjat Y. Shariff, senior vice president of operations at Panera Bread, after the presentation. “I was hoping to see more population growth in Rhode Island. We’d like to see more employment in Rhode Island. [But] in general we’re growing.”
His company has seven eateries in the state and is poised to open an eighth, the state’s first drive-through, in Lincoln.
Lodging across the country is growing quicker than it is in Rhode Island, said Rachel J. Roginsky, principal of the Pinnacle Advisory Group, a hospitality consulting firm based in Boston. Her data comes from Smith Travel Research Inc.
“Long term, we’re not anywhere near where we were before [in terms of high growth], but we are seeing some positive trends for slow, modest growth,” Roginsky said.
For instance, in Providence, daily room rates and revenue per available room (RevPAR) are trending upward, though they’re still below their peak between 2004 and 2007.
“Corporate travelers are still very price sensitive and still shopping around so room rates are down, which is different than the rest of the country, but you do have RevPAR up,” she said.
There are similar positive trends in Warwick, but the average daily rate per room is “still way off,” she said. Likewise, no new supply of rooms is projected for Newport this year or in 2014, though the wedding market is strong and government room rates like those at the Navy base are projected to rise 6 percent next year.
The forecast “is encouraging,” said Mark Gervais, general manager of the Hotel Viking in Newport, after the meeting. “It’s not double digit growth, which we’d love to have, but it’s steady, and the fact that it’s growing is a great thing. We’ll take it.”