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Glenwood lodges see drop in summer occupancy

John StroudPost Independent StaffGlenwood Springs, CO Colorado
Kelley Cox | Post IndependentKana Brevig, front desk supervisor at the Hotel Denver in Glenwood Springs, helps a customer with information about the hotel and the area. As with other sectors related to the tourism industry locally, lodging occupancy was down during the summer season this year.
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GLENWOOD SPRINGS, Colorado – Though the economic downturn apparently had only a moderate impact on summertime business for local tourist attractions, Glenwood’s lodging statistics were most definitely off compared to normal.City of Glenwood Springs accommodations tax revenues are down 27 percent for the year through August – from nearly $600,000 for the first eight months of 2008 to slightly more than $435,000 for that same period this year, according to city finance department figures.And, for the summer months alone, occupancy rates for Glenwood Springs hotel and motel rooms included in a statewide lodging database were down an average of 9.2 percent.Of the 1,528 hotel, motel and bed & breakfast rooms available to guests in Glenwood Springs, 843 are included in the Rocky Mountain Lodging Report (RMLR).For those rooms, compared to the same three months last year, the occupancy rate was down 6.8 percent to 71.1 percent of full occupancy for June.That was followed by a 5 percent drop to 80.6 percent for July, and another 15.9 percent drop to just 72.5 percent for August.”One thing we realized for August is that a lot of the Denver schools start earlier now, and we’re losing some of those people,” said Kate Collins, vice president of marketing for the Glenwood Springs Chamber Resort Association. “So I’m not sure we can attribute that to the economy as much as school calendars.”Still, occupancy rates for the summer months typically hover between 80 percent and 90 percent, based on statistics from 2006 through 2008, and historically going back several years before that.Year-to-date for 2009, Glenwood’s lodging occupancy has been running between 5 percent and 17 percent below last year’s figures.The occupancy rate even dropped below 50 percent in January, February and April of this year – something that hadn’t occurred at all in any month for the previous three years.Likewise, city sales taxes are also down an average of 17.4 percent for the year through August, including losses of between 17 percent and 20 percent through the summer months, compared to last year.Hotel Colorado held steadyStill, for destination types of lodges such as the century-old Hotel Colorado, the numbers weren’t off as much as the lodging industry as a whole during the summer months.”It was an interesting summer,” Hotel Colorado General Manager John Burns said. “The recession had a tremendous impact on our group market, but our transient market held up well.””Transient” guests are those booking their stays within three weeks of their planned arrival.”People were making last-minute decisions to head up for a weekend,” Burns said. “This year has pretty much equaled our transient market from the year before. And it got better as the summer went on.”The hotel’s group market was a different story, though.”Some of our groups that had been booked well ahead of time canceled for the year, especially a lot of government and business groups,” Burns said.While the Hotel Colorado typically is booked up months ahead of time for summer weekends, there was some weekend availability this past summer right up until the week before, he said.”Overall, we were probably averaging in the low 70s [percent] occupancy over the summer,” Burns said. But that was only down about 2 or 3 percentage points from the previous summer, he said.As with Glenwood Springs as a whole, the primary customer draw for the Hotel Colorado is from the Front Range. And those guests tended to be more cost-conscious this year.”This year’s traveler was more shoppy, looking for better deals,” Burns said.For that reason, some of the Hotel Colorado’s package deals held strong, such as family and senior packages, and the popular swim-and-stay package that includes lodging and a pass to the Glenwood Hot Springs pool, he said.One definite impact on the travel industry for Glenwood this summer was also the disruption in Amtrak service through town for several weeks in July, August and September.”That didn’t get back into full effect until just this month, so there was a definite impact on train business coming our way,” Burns said.Looking ahead, he said October and early November are typically among the hotel’s slower months.But, “things are tracking pretty good for the transient market going into the holiday season and our Christmas lighting,” he said. “We usually do pretty good with that.”The Hotel Colorado kicks off the holiday season with the traditional hotel lighting ceremony and fireworks on the Friday evening after Thanksgiving.Transient worker factorThe lower numbers for the lodging industry this year can be chalked up to two things, chamber marketing director Collins observed – fewer people visiting Glenwood Springs for vacations due to the recession, and the downturn in the oil and gas and construction industries, also tied to the recession.”No question, some of the downturn is related to oil and gas workers not filling up motel rooms like they were just last year,” Collins said.Though she didn’t have any specific data to back it up, she estimated that about 13 percent of Glenwood’s lodging business over the past several years was attributable to oil and gas and construction workers from outside the area checking into rooms for short-term and even extended stays while working jobs in the area.That probably served to inflate Glenwood’s lodging statistics from a tourism standpoint, Collins said. The other effect it had was that room rates went up due to the higher demand, she said.”Availability was down, because rooms got filled up with both tourists and industry people, especially during the peak months,” she said. “Demand was steady for tourism, so prices went up.”One result of that phenomenon was an increase in Glenwood’s accommodations tax revenues, from $571,245 in 2005 to $831,994 in 2007, before the numbers began falling off last year.That meant the city had more marketing power, even though the upturn wasn’t strictly tied to tourism.Now, with the downturn in the lodging sector, there’s some new thinking when it comes to future marketing strategies, Collins said.”From a marketing perspective, it has caused us to shift back to April through October, instead of October through April,” she said. “We’re now trying to maintain our summer market share, instead of building out the shoulder seasons.”One further adjustment the lodging community may need to consider is a restructuring of room rates to recapture market share in the future, Collins said.The RMLR also tracks the average daily rate (ADR) for hotel and motel rooms in Glenwood Springs. And local lodges have been lowering their rates some this year in response to the recession, including an $11.15 drop in the ADR for July, from $127.82 per night in July 2008 to $116.67 this past July, and $13.02 less per night for September, from $118.78 to $105.76.Still, room rates may have to go even lower for Glenwood to stay competitive, Collins predicted.”It can be hard for individual lodges here to have a realistic idea of where rates should be, compared to what our competitors are doing,” she said. “Even though occupancy is down in big percentages, the rate hasn’t gone down that much.”I study it and spend a lot of time outside of the community visiting other destinations, so I hear it on the front lines,” Collins said.A little more competitionAnother factor that could impact hotel and motel room rates in the future will be the arrival of two new hotels at Glenwood Meadows, which are scheduled to open in February 2010.The new Marriott Resident Inn and a Courtyard Hotel by Marriott will add 225 rooms to city’s lodging options. The hotels are nearing completion just to the east of the Glenwood Meadows shopping mall, across from the Glenwood Springs Community Center.One of the city’s goals in approving the two hotels as part of the Meadows development was to “create a full service hospitality site.” That goal included the addition of more lodging, and the accompanying conference and meeting room space.”Glenwood has needed more inventory for a while,” Collins said. “And with the national flags, it will enhance our product mix.”For the short term, however, existing lodges are going to have to look at rates and what they offer, she said.”There will need to be some extra value to entice those customers,” Collins said. “I think we have to re-educate our core market that Glenwood is an affordable destination. We’ve been in a little bit of an artificial bubble, and that’s affected people’s perception.”The Hotel Colorado’s Burns agreed that bringing in two major brand names to the lodging mix will change the competitive landscape a bit.”With the Marriott chain, a lot of points go to them,” he said. “Our market is a little bit different, and whenever you bring in more additions you’re going to see more occupancy in slow times.”But this year’s demand has been unusual, he added.”What I see is that Glenwood Springs will continue to grow as a destination,” he said. “I know I’ve been amazed since moving here last year with all the fun things there are to do.”Overall, even with the economic downturn of the past year and a half, Collins said she believes Glenwood Springs is well-positioned to weather the recession from a tourism and marketing standpoint.”Our goal is to increase the overall satisfaction of the repeat customer, and a lot of it comes down to what we offer that group of people,” she said.jstroud@postindependent.com


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