The projections look better than one might have expected: More than half of U.S. leisure travelers plan to take as many trips this year as last, a quarter expect to take more, and only 18 percent expect to take fewer trips, says the 2009 National Travel Monitor, a key industry survey.
But that doesn’t mean things aren’t tough in the travel and leisure world. With the economy making everyone more budget conscious, fewer foreigners are expected to visit U.S. destinations this season. And the competition for tourist dollars is fierce at all levels of the industry.
Evan Smith, president and CEO of the Newport County Convention & Visitor’s Bureau, spoke with Providence Business News recently about the outlook for Rhode Island’s top tourist destination.
PBN: How was last year for you, and do you expect this season to be better?
SMITH: We actually had a reasonably good summer, and it wasn’t until September that the dark storm clouds started to blow in … and September, October, November and December were disappointing. We finished down 4 percent in 2008, and as each month went on … it just kept getting worse. As we look towards this year, Newport makes 80 percent of its revenue from May through October … and we just started our peak season. We’re expecting that people are going to travel closer to home, they are going to be very frugal travelers and they’re going to be looking for good value.
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PBN: How competitive is Newport with that audience?
SMITH: We believe there are two things that are going to help us: geography – 10 percent of the American population, 30 million people, lives within four hours of Newport. And the second thing is that … Newport has many things for many different travelers, whether it be recreation, architecture, our strong special events calendar, weddings.
PBN: How much do you expect your mix of travelers to change?
SMITH: Massachusetts, Connecticut, New York and New Jersey [account for] 60 percent of Newport’s travel and tourism. That has been true for the 20 years I’ve been here. But one of the big shifts is we are expecting a small decline in international travel. … This past year we finished at about 12 percent, and it will drop down to about 8 percent. … International travelers tend to stay longer than domestic travelers, so we anticipate this year that we’re going to see length of stay – which right now is 2.4 nights – shorten for a number of reasons.
SMITH: The lodging industry has either left its rates at ’08 levels or even reduced them … by as much as 25 percent. Many of our hotels and bed and breakfasts have made adjustments to keep competitive with regional properties, which is good for the traveler, not necessarily for the business owner. … One of the things about Newport is that we have all levels of accommodations, luxury, mid-range and economy, and I think all three levels are aware of what’s driving the market now, affordable value.
PBN: Could they have substantial volume and still lose money this year?
SMITH: I think everyone understands that this is going to be a challenging year. Our budget is dependent on the lodging tax, and for the first time in 20 years, we [reduced] our budget, by 7 percent. … [There is also] another variable that we can’t control, and it’s weather. If we have a bad weekend … we can have a cancellation rate from 10 to 40 percent. A wet weather weekend can cost the city millions of dollars in lost revenue.
PBN: Do you expect to be even more vulnerable to the weather this year because of the loss of international tourists and the generally shorter stays?
SMITH: It is something that is giving the hospitality industry heartburn right now. Because we are experiencing the shortest booking time we’ve ever seen. People are waiting till two weeks before to book their holiday; 20 years ago, people would book their vacation a year ahead, then it was six months, three months, one month.
PBN: How does Newport’s situation compare with other resorts across the country?
SMITH: My colleagues in other places were astounded that we finished only 4 percent down last year. There are destinations that finished 15, 20, up to 35 percent down in ’08. So people asked me, “how did you do it?” And I said, it’s our diversity. It’s all of the things that people can choose to do here. Having said that, all American destinations are in the same boat, and there’s immense competition this year. •
