Travel & Tourism in a Resort Market
Today we look at travel and tourism for its particular importance to greater Asheville real estate.The Basics
Like many resort, retirement, or vacation areas, our real estate market
, especially in the adjacent counties, is traditionally fueled by
buyers from outside of the region
Today's visitors are tomorrow's buyers. Real estate and tourism are thus linked. There was an independent study in our county, presented by a developer that claimed as much as 80% of real estate activity here could be categorized as resort, vacation, second homes, retirement, and so forth.Our outlook
for tourism in the second half of 2009 is bearish. There are too many negative indications in that sector this far into the season.
Consider that seasonal operations like white water rafting make their money in literally 60 days, from June 15th and August 15th. More than 400,000 people take a NC raft trip each summer. Visitor traffic in that industry drops off drastically five weeks from now by as much as 60%, and then drops again after Labor Day to a relative trickle.
The good news is that attractions and accommodations will be discounted, many are at present. There is after all, a concerted effort to market Asheville as a value destination
. Back in May, USA Today mentioned us
as a top summer bargain, some nice publicity.Summer Travel
July 4th weekend kicks off the most intense six weeks of summer travel. Gallup however reported for the week of July 4th, 2009 that
Americans spent 37% less money than the same week in 2008. Hot dogs won out over steaks
is the tongue in cheek analysis.
2008, the year of $4.00/gal gasoline, gave birth to the word "staycation"
indicating that we were spending leisure time at home. Despite lower gasoline prices in 2009, Vehicle Miles Driven, as reported by the US DOT
have dropped strikingly since late 2007.
On a percentage basis, Americans have cut back on their driving to a larger degree than in either of the great oil shocks in the past 35 years.
People in local tourism often say that one of our great strengths is that we are within a day's drive of half the population in the US. With five weeks left in the peak season, that observation seems to hold less weight than in the past.Hospitality IndexesHotel RevPAR, (Revenue per available room)
: This is reported weekly. Occupancy was down 6.0%, rates were down 7.4%, with RevPAR down 13.0%. The Asheville Citizen Times reports similar trends
during the month of May, not a precise time line comparison, but nevertheless, (ED Note: Citizen Times articles eventually disappear from their original locations):
Hotel sales in Asheville were down by almost 14 percent in May compared with the same period last year. The occupancy rate was down 11 percent for May, the last month for which figures are available.
This trend has been going on nationally for some time. Bloomberg takes an in depth look
at the hotel industry. Indexes are in the post September 11th ballpark, with larger decreases at the luxury end. The Wall Street Journal echoes similar numbers
from a Commerce Department analysis in Mid June.Restaurants are down
on a national basis. May, 2009 marked 21 consecutive months of traffic declines, as reported by The National Restaurant Association.And Locally?
Beyond the occasional newspaper piece, hard data is difficult to come by in local tourism. Most of it is anecdotal, but leisure and hospitality employment
is down almost 10%. Asheville's flagship destination
looks to be in a cut back mode for 2009, with rumblings about other noted mountain destinations as well.
Last summer, a couple of large attractions were on record about shrinking their marketing strategies. An example would be to weight brochure distribution more heavily within a 4 hour radius of Asheville. Formerly, some attractions distributed to a 12 hour radius or more.
One would assume, with five weeks to go in the peak season, that similar strategies are in effect for 2009. Time will tell us soon what transpires in real estate, at which point we will all anticipate leaf season traffic.
Thanks for stopping by,Black Bear Realty Website
828 689 2055
Anti Spam Graphic: info AT BlackBearRE DOT com
Filed Under: Asheville News & Analysis