Sunday, May 27, 2001

Tourism dropoff hits hotels hardest

Economy, Reds, unrest all factors

By John Eckberg
The Cincinnati Enquirer

        As the summer travel season begins, tourism in the Tristate is lagging, and that has hospitality industry officials worried.

        A sluggish economy and higher gasoline prices are two reasons why hotel occupancy, for example, was off 26 percent in April. But the economy and gas prices haven't hurt tourism in other regional cities, such as Cleveland, Louisville and Indianapolis, where business is up.

        That leaves other explana tions for Greater Cincinnati's weak performance to date, including:

        • The lingering damage to the city's image from April's riots, which erupted after the April 7 shooting of an unarmed African-American by a white Cincinnati police officer.

        • The Comair pilots strike, now in its 63rd day.

        • The poor performance of the Reds so far this season, coupled with higher ticket prices at Cinergy Field and the injury to superstar Ken Griffey Jr.

        Fewer visitors means fewer people in hotels and restaurants. That translates into lower revenue for those businesses — and fewer tips for service workers such as Joyce Jacobson, a server at downtown's La Normandie Taverne & Chop House. She earned $500 to $600 weekly last year, but now makes $200 to $300 per week.

        “Business is so bad, they don't need as many girls on the floor,” said Ms. Jacobson, a 58-year-old Madisonville resident. “It's really sad.”

Hotels are hurting

        The falloff in tourism through the spring hasn't hit evenly across the Tristate, with attractions such as the Cincinnati Zoo showing higher sales. Where the drop has been sharpest and most painful has been for hotels in Northern Kentucky and downtown.

        “Last April, this market had a 58.4 percent occupancy,” said Barbara Dozier, vice president of sales and marketing for the Northern Kentucky Convention and Visitors Bureau. About 7,000 rooms are in Northern Kentucky.

        “This April, we had a 42.8 percent occupancy. That's a 26 percent decrease year to year for April. In a word: It's disastrous.”

        In Hamilton County, collections from a 4.5 percent hotel and motel room tax are 7.5 percent less this year through March, compared with last year, said Michael J. Wilson, president of the Greater Cincinnati Convention and Visitors Bureau.

        The bureau had budgeted $947,000 in revenues from tax receipts for the first three months of 2001 but

        realized only $875,000. That's a $72,000 swing in the wrong direction.

        Receipts are likely to be even worse for April, he said.

        “Are times tough right now? Definitely,” Mr. Wilson said. “But we'll get through it. This city and community has many great attributes.”

Image suffers

        Hotel managers fret about the national business slowdown, said Michel Sheer, president of the Greater Cincinnati Hotel and Motel Association and general manager at the Vernon Manor Hotel and Warren County's Kings Island Resort and Conference Center.

        The number of business travelers “has softened substantially. What I'm hearing is that throughout the region we are off, and it's in terms of several million dollars,” he said.

        When you add the national economy to the April riots, hotel operators have a particularly difficult problem.

        Convention planners have picked other cities over Cincinnati because of fear among some would-be visitors.

        Business groups and downtown boosters have been working behind the scenes on a campaign to mend the city's image. But the campaign — an effort among public relations and advertising firms, arts and business groups and others loosely coordinated by Downtown Cincinnati Inc. — won't be unveiled until early June.

        Experts say that besides the rioting, there are two other reasons for fewer visits here:

        • A Comair pilots strike has meant that business travelers and others can no longer affordably fly here from other American cities. “The first three months of the year are slow anyway - it's winter,” Ms. Dozier said.

        “Then Comair goes on strike and it was like falling off the edge of the earth. Occupancies just went into a steep decline.”

        • Usually a tourism magnet, the Cincinnati Reds have a losing record. Attendance has swooned by 23 percent when compared with last year, when the team nearly set a record with 2.57 million. Since then, some seat prices have increased.

        The 6,816 blue-level Zone A seats closest to the field now cost $28, a $7 increase over last year and twice as much as 1998 prices. Other seats cost $1 to $5 more than last year.

        Meanwhile, a hamstring injury has kept Mr. Griffey, whose return to the Tristate helped fuel attendance last year, out of action for much of the 2001 season.

        The riots have hurt the Reds' attendance and downtown in general, said team owner Carl Lindner last week. “This city is a great place to live,” he added. “To me, it's a temporary problem that has to be worked out.”

Travel woes

        Executives at the Greater Cincinnati Convention and Visitors Bureau acknowledge that hotel occupancy is down but quickly point out that it is not necessarily because of April's nights of riots.

        “I personally can't make a direct correlation between the unrest and where we are today,” said Gayle Harden-Renfro, communications director of the bureau.

        “We have a number of challenges: the unrest is one, Comair is another and possibly rising gas prices.”

        The Big Pig Gig had a positive impact last summer. “It's hard to measure exactly how much but it had an impact - probably more locals than overnighters, but it was an added attraction,” said Wayne Bodington, general manager of the Westin Hotel downtown.

        “To be sure, this summer is going to be much weaker than last year.”

        It's too soon to write off tourism here in 2001 because an increase in gasoline prices can benefit the region, Ms. Harden-Renfro said.

        Because tourism marketing targets households within a 150-mile to 200-mile radius, many vacationers might choose to stay close to home instead of traveling to a resort community in Florida or South Carolina.

        “Rising gas prices could be a plus,” Ms. Harden-Renfro said. “Everyone wants to get away and the fact is that summer hasn't started yet.”

        And not all Cincinnati venues have falling revenues and attendance.

        At the Cincinnati Zoo and Botanical Garden, April was a record-breaker for sales of memberships. “We expect to see the same for May,” said Chad Yelton, spokesman for the zoo.

        Membership revenue or money from the purchase of primarily family memberships is up 40 percent this May compared with May 2000.

        Bogart's in Corryville, a concert hall, has sold out eight shows so far this month and has a good shot of selling out nine, said Jim Moehring, executive director of SFX Entertainment, manager of the facility. “Bogart's is a mainstay,” he said.

        The Newport Aquarium, which opened in May 1999, is exceeding expectations for membership and group sales and is on target with attendance through May, said Lisa Popyk, senior marketing manager.

Louisville benefits

        If Cincinnati wants to turn around the hotel occupancy picture, it had better figure out a way to expand the Albert B. Sabin Cincinnati Convention Center, said Ron Scott, president and chief executive of the Greater Louisville Convention and Visitors Bureau.

        Cincinnati's shortfall has led to a Louisville windfall. With two convention centers in Jefferson County - a 300,000-square-foot facility downtown and a 1 million-square-foot facility to be expanded to 1.2 million square feet by 2003 - many conventions that might have gone to Cincinnati have instead landed in Louisville.

        “Cincinnati's problem - an unwillingness to build a convention center - has worked to our advantage,” he said.

        And that eats at the Cincinnati convention bureau's Mr. Wilson.

        “It bothers me greatly to see convention business lost to surrounding cities,” he said. “That's factored directly to our loss and their gain. And almost all of it came in first quarter.”

        This spring, Cincinnati has targeted smaller towns and cities in the region with a print and broadcast marketing campaign. The effort from the bureau and partners such as Paramount's Kings Island and the Cincinnati Zoo is not what it used to be.

        Last year, $1.6 million was spent to tout the charms of the Queen City. This year, the marketing budget is $1 million because funds have been earmarked for a Fountain Square visitors center.

        “We can only do what we have in our budget,” Ms. Harden-Renfro said. “And the budget is attached to the hotel/motel tax.”

        Amy Higgins and Cliff Peale contributed to this report.

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