If a visitor’s head hits a bed in Savannah, it definitely makes a sound.
Cha-ching.
Savannah-area hotel/motel tax collections set a new record for the third consecutive year in 2012. The 6 percent tax generated approximately $17 million in revenue. Those funds are divided among the city of Savannah, Chatham County, the municipalities, two destination marketing organizations and the group that oversees the Savannah International Trade and Convention Center.
“This is an important revenue source that helps us both promote Savannah to the world and maintain the physical assets that make our community one of the nation’s most livable cities,” said Savannah’s acting city manager Stephanie Cutter.
Local tourism industry insiders look beyond the tax collection returns and what they reflect: Growth in occupancy and average room rates. Savannah underwent a hotel building boom at the same time the recession hit five years ago, and the tourism recovery of the last three years has gradually helped absorb the additional space.
The occupancy rate rose to 63.7 percent countywide, up from 61.3 percent in 2011. The historic district was the most popular destination, with a 74.4 percent occupancy rate. The average room rate rose to $91.38 overall and $140.74 downtown.
“Even with three years of up and up, I would not say we are recovered,” said Michael Owens, CEO of the Savannah Area Tourism Leadership Council, an industry advocacy group. “But we are clearly on an uptick and are very hopeful that continues.”
Looking to the future
Demand still falls short of supply to an extent.
The average nightly room rate in the historic district remains $15 below 2007 levels. Between 1,600 and 1,800 rooms have been added to the downtown inventory since then.
And more rooms are on the way. At least nine new hotels are in the construction or planning stages.
The leader of Visit Savannah, the local equivalent of a convention and visitors bureau, doesn’t concern himself with the beds so much as the heads.
In Joe Marinelli’s seven years leading local tourism’s chief marketing arm, he’s broadened the organization’s reach. Visit Savannah’s success is due in part to attracting or starting new events such as the Rock ’n’ Roll Savannah Marathon and the Craft Brew Fest and leveraging Internet and social media marketing opportunities.
Savannah is one of the few U.S. tourism destinations showing consistent growth, he said.
“The expectation is we will continue to absorb new inventory” of hotel rooms, Marinelli said. “Like any business, we have to continue to work hard to find new customers and keep the customers we have.”
Approach to growth
Quantity won’t equal success going forward, however.
Savannah’s tourism leaders are striving to attract more affluent visitors, reflected in the recent growth in dining options and the trend toward more upscale and boutique hotel offerings.
At the same time, the “wide spectrum” of accommodations allows Savannah to “fit every niche” with visitors, the Tourism Leadership Council’s Owens said.
Savannah’s busy events schedule appeals to a wide visitor demographic and has “filled in many of the soft spots” in the calendar, Marinelli said. Savannah sees tourist traffic even in the steamy summer months these days. Bed-tax collections in June, July and August were up 21 percent in 2012 compared to the pre-recession heyday of 2007.
“The notion that our summer season is a slow time,” Marinelli said, “no longer holds true.”
The mild weather so far this year has contributed to another strong start for tourism in 2013. Downtown is nearly sold out this weekend, Marinelli said. March is expected to be strong again, with St. Patrick’s Day falling on a weekend for the second straight year.
“The first quarter sets the tone for every year,” Marinelli said. “2013 has the potential to be another record-breaker.”
Savannah area lodging accommodations saw gains in occupancy rate and average daily rate in 2012, resulting in a record year for hotel/motel tax collections.
Submarket|Occupany 2012|Occupancy 2011|Average rate 2010|Average rate 2011
Midtown/East|59.4%|57.7%|$71.59|$69.67
Airport|64.9%|60.1%|$65.68|$63.94
Historic District|74.4%|72.6%|$140.74|$136.81
I-95 South|52.6%|51.7%|$59.87|$57.81
Sector|Occupany 2012|Occupancy 2011|Average rate 2010|Average rate 2011
Luxury|72.8%|71.1%|$158.35|$155.23
Upscale|76.2%|74%|$117.22|$112.82
Midprice|67.9%|65.7%|$81.68|$79.35
Economy|54.7%|51.9%|$58.04|$56.09
Budget|52.1%|49.4%|$42.69|$41.10
Source: Visit Savannah