August 8, 2016
This article appeared in the Tampa Bay Business Journal on Thursday, August 4, 2016
“Hotel occupancy grows despite fewer foreign visitors to Tampa Bay” by Frances McMorris
Tampa Bay should expect to see a decline in visitors from foreign countries over the next couple of years, according to a tourism expert at the 17th annual Hillsborough County Hotel and Motel Association Trends & Forecasting Forum held Thursday at the Tampa Airport Marriott.
“We’re seeing a decline in particular from the United Kingdom and Brazil,” said Lou Plasencia, CEO of The Plasencia Group, the Tampa-based hospitality sales, debt-and-equity and consulting firm. For the next year or two, the numbers on foreign visitation will either be flat or will dip, he said as he delivered his “Cracked Crystal Ball” report to the forum.Even so, Plasencia said Tampa Bay will see at least three more major hotel transactions that are greater than $20 million by the end of the year. He also said a new record will be set in Tampa Bay this year as sales volume and per-key pricing will be the highest ever recorded.
Tampa Bay is posting strong hotel statistics with higher occupancy rates driving the market, according to several speakers at the HCHMA forum.
“Tampa Bay continues to grow as a popular, affordable and year-round travel destination,” said Santiago Corrada, president and CEO of Visit Tampa Bay, the official tourism marketing arm for Hillsborough County. “The numbers for July have been very healthy,” he said.
Visit Tampa Bay and Hillsborough County reported $2.3 million in hotel bed-tax collections for July, which represents an 11.6 percent rise over the same month last year. The collections reflect hotel room-nights sold in June. Hotel occupancy for that month averaged 73 percent, 4.4 percent higher than the same month in 2015, according to industry analyst STR Inc.
Hotel profitability for Hillsborough County in June grew 12.6 percent year-over-year, reaching $76.24 per available room. The county led its 10 benchmark competitors across the country in terms of profitability growth for June. That list includes cities such as Orlando and Fort Lauderdale; Austin, San Antonio and Fort Worth in Texas; Long Beach, California; Charlotte, North Carolina; Nashville; Baltimore; and Milwaukee.
Visit Tampa Bay’s Vice President of Convention Sales Alex Kaptzan told the HCHMA forum attendees that 543 meetings are projected for 2016, with 452,000 room nights and a quarter of billion dollars in terms of economic impact.
Rooms in Tampa Bay are full three out of five nights, according to Karrie Keen, senior operations analyst at STR Inc., a travel research firm.
While occupancy has picked up in both Hillsborough and Pinellas counties, “we’ve probably seen the peak,” Plasencia said. “There is still positive growth for the next two years until new supply hits the market.”
Tampa Bay, St. Petersburg and Clearwater may still be seen primarily as leisure destinations, but Plasencia advised the hoteliers to concentrate on attracting more business travelers. He noted that their per day spend is $260 compared to $145 for those just on vacation.
“Go after that commercial, corporate traveler,” he said.
Plasencia also offered another piece of advice: “For those looking to renovate your hotels, do it now.” Interest rates are set to rise, he said.