is still a popular journey.
(Tom Croke)
Newport’s lodging industry will struggle to meet already-thin growth projections this year, according to the organization that tracks Newport County’s hotel-tax receipts.
While the lodging tax receipts for May were only slightly weaker than last year’s, Newport County Convention and Visitors Bureau officials are bracing for lackluster results for last month. Hotel operators are blaming a drop in not only advanced reservations by vacationers but also a marked slowdown in the number of corporate bookings.
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“I think what’s really caught people off guard is how soft the market went in June,” said Evan Smith, the bureau’s vice president of marketing. The state likely won’t finish processing June’s tax receipts until mid-July, Smith said.
After at least seven straight years of growth ranging from 5 to 12 percent, the bureau projected just 3 percent growth for Newport’s lodging industry this year. But that projection is now a “best case scenario,” Smith said.
The downturn is afflicting the lodging market on a national scale, tourism officials say, as a stagnant economy and slumping stock market have cut into vacation plans. “It does seem like folks are being a little bit tighter with their travel dollar,” Smith said.
A contraction in the leisure market has led many of Newport’s hotels and inns to lower room rates and offer more promotional discounts to entice vacationers. But for Newport’s large hotels, a significant drop in corporate bookings has also hurt.
“On weekends, we’re close to where we were last year, but that’s only two nights a week,” said Newport Marriott Hotel General Manager Bob Schmeck. “Sundays through Thursdays, the major hotels in Newport need convention business, and corporate bookings are down.”
Tom Delaney, general manager of Hyatt Regency Newport, agreed that group programs — or bookings of 15 or more rooms — have slowed. “We’ve had pretty good weekends for the most part,” he said. “But we’ve seen particular weakness in our group business.”
Smith said it’s unusual to have both leisure and corporate business crumble simultaneously. Typically, business travel is somewhat insulated from a slowing economy, he said.
“But this year the corporate market has been the first to soften, and that’s having a domino effect into the leisure market,” he said.
Corporations have tightened their travel budgets in the past year, leading some to cancel or postpone meetings, according to Martha Sheridan, vice president of sales for the CVB. Others are choosing cheaper destinations or cutting their number of meetings.
“Any one of these factors is going to impact our group-business bookings,” Sheridan said. To spark corporate sales, bureau officials this month will embark on a “sales mission” to promote Newport as a meeting and convention destination to corporate event planners in Boston, Providence and Hartford — three of Newport’s key feeder markets for corporate customers.
While both leisure and corporate business are sagging, Newport’s big events, such as the Sunset Music Festival, have drawn strong crowds. “All indications are that day visitation seems to be quite healthy,” Smith said.
Indeed, the volume of vehicles crossing the Clairborne Pell Bridge was up 3.7 percent in May vs. a year earlier, according to Kenneth Bianchi, executive director of the Rhode Island Turnpike and Bridge Authority. Bianchi said he thinks the June numbers will also be higher than last year.
“But the problem seems to be a slight shift away from the luxury (lodging) market and into the mid-range market,” said the CVB’s Smith. In short, tourists still are flocking to Newport, but fewer of them are willing to spend big money on high-end hotels and bed-and-breakfast rooms.
“We’ve had rooms (vacant) every night this summer,” said Debbie Miller, co-owner of Bed & Breakfast Newport Ltd., which handles bookings for more than 80 inns and bed-and-breakfasts in Newport. Miller, who estimates that bookings might be down as much as 20 percent, said most of the firm’s clients have dropped their rates.
The slowdown has led some hotels to trim staff. Schmeck said the Marriott has cut its staff this summer to about 350, down from close to 400 last summer.
