Archive for Sunday, April 21, 2002

City deals with rocky 2001

Travel spending in Lawrence declines by about $1.5 million

April 21, 2002


They say in the travel industry that getting there is half the fun, but for Lawrence companies that rely on travelers for a good part of their business, getting to the end of 2001 was no fun at all.

In fact, according to the Lawrence Convention and Visitors Bureau's annual report released this week, it may have been downright painful for some.

The Lawrence Visitor's Center, with volunteers like Judy Henderson,
left, and Bunny Richards, offers a variety of local and regional
travel and tourism materials at the Union Pacific Depot. Lawrence's
annual tourism report reflected a decrease in visitors and in money
added to the local economy.

The Lawrence Visitor's Center, with volunteers like Judy Henderson, left, and Bunny Richards, offers a variety of local and regional travel and tourism materials at the Union Pacific Depot. Lawrence's annual tourism report reflected a decrease in visitors and in money added to the local economy.

CVB President Judy Billings estimates the economic impact tourism and convention visitors had on Lawrence dropped by about $1.5 million in 2001, down from $36.9 million in 2000 to $35.3 million last year.

Numbers from the city paint an even clearer picture of how slow Lawrence's tourism industry was in 2001. Revenues from the city's 4 percent tax on hotel- and motel-room sales hit their lowest level since 1997. The city collected approximately $446,000 in 2001, down from $461,000 in 2000 and well below the recent high-water mark of $535,000 in 1999.

'A huge drop-off'

The reasons for the decline are no mystery.

"The economy earlier in the year was showing a bit of a slowdown and the industry was predicting a downturn already, but then when Sept. 11 hit, we were like everyone else in the world and experienced a huge drop-off," Billings said.

Activity on the CVB's online hotel booking Web site gives a good glimpse at just how big the drop-off was. Prior to Sept. 11, the system, which allows users to book a room at eight Lawrence hotels, accepted at least 35 reservations every month, with most months seeing 50 or more reservations.

In September it dropped to less than 20 and kept falling to the point that in December it accepted less than five.

Fear of travel after the terrorists attacks hit the Lawrence market hard, Billings said, but wasn't entirely to blame.

"Even without the terrorist attacks, we still probably would have seen our tourism numbers go down a little bit or maybe stay level in a best-case scenario," Billings said. "That's just because the economy was slow anyway, and travel is usually one of the first things families cut from their budget, and conventions are usually among the first things to go with businesses."

The decreased demand led Lawrence hotels and motels, on average, to cut their daily rates by $5 to $6, which also helped fuel the decline in the city's transient guest tax revenues.

The drop in the guest tax dollars led to pain for the CVB, causing the organization to cut $60,000 from its 2001 budget because the guest tax revenues are the group's main source of funding.

A slow recovery

But it could have been worse, some say.

"I think given that after Sept. 11 everything seemed to virtually stop in travel and tourism, we fared pretty well," said Joe Flannery, president of Weaver's Department Store and past chairman of the CVB advisory board. "One of the good things about Lawrence is that with the university, we can still continue to have decent tourism even during times like these."

Flannery said a good indication of that was Lawrence's hotel businesses didn't contract but actually expanded during the rough year. The year marked the opening of the SpringHill Suites by Marriott in the former Riverfront Mall in downtown and a new Holiday Inn Express on South Iowa Street.

Other properties also improved themselves, with the TravelLodge changing ownership and beginning a remodeling process, and the Lawrence Holidome, the city's largest convention hotel, successfully reorganized after filing for bankruptcy protection.

Flannery said the projects represented a good amount of optimism in the Lawrence travel market, and he said he thought the industry will begin to show signs of improvement this year, although not likely at the rate most would like.

"I think this year will be better than 2001, but I don't see travel and tourism being as good as the year 2000 quite yet," Flannery said. "But I think it's coming back. It will just be a slow process."

Billings also is being conservative but upbeat in her assessment of the future. She's budgeting for a 3 percent increase in the city's bed tax revenues during each of the next two years.

"Just this March we did a co-op ad in Midwest Living magazine, and we have already gotten 3,000 requests for more information," Billings said. "That tells me things are going to pick back up, but we'll just have to wait and see."

Stay the night

But CVB officials won't be waiting idly.

Billings said the slowdown had caused the group to slightly rethink its strategy in attracting visitors and about whether Lawrence actually may be in a position to capitalize off of the way travelers think post-Sept. 11.

"All the trends are telling us that people probably will take shorter vacations," Billings said. "They have been doing that for a while, but in the past they were still jumping on a plane or taking a cruise for a weekend. But now people are having some second-thoughts about doing that."

Billings said given those trends, Lawrence might benefit because it is easily accessible by car and has never been reliant on attracting travelers who fly.

In fact, Lawrence already is successful in attracting visitors for a short period of time. The CVB estimates that 54 percent of the city's estimated 960,000 visitors a year are day-trip visitors.

"We know that the majority of our out-of-town visitors come from the Kansas City area, and as a result they don't feel the need to spend the night here," Flannery said. "We need to see if we can convince them that they do need to stay the night."

Big dollars are at stake. The CVB estimates that the 54 percent of Lawrence visitors who stayed only for the day contributed $9.9 million to the Lawrence economy, compared to the $25.3 million spent by the 46 percent of visitors who stayed at least one night.

"It is a simple formula," Billings said. "If they spend the night, they spend more. But it will take some creative marketing on our part to make those day trip visitors become overnight visitors, because even from as far away as Wichita it is pretty easy to come to Lawrence and drive back in the same day."

Billings and her staff are trying to tackle the problem by working with businesses to create package deals to entice them to stay.

Billings said that might mean tickets and backstage passes to a Lied Center event, coupled with a meal at a downtown restaurant and a room at a Lawrence hotel.

"We have to come up with packages that are interesting to visitors and provides them some sort of value," Billings said.

Looking long term

Package deals, though, aren't the ultimate answer for the Lawrence tourism industry, both Billings and Flannery said.

Both said the community was still in need of a "destination driver," which is an attraction that would draw people from a national or at least regional area to come to Lawrence for a vacation.

Billings said she thought Lawrence had good potential to develop a destination driver but cautions it won't happen overnight. She currently is serving on a committee that is seeking to have the area listed as a National Heritage Area through the National Park Service.

There are only 24 such areas in the country and would give Lawrence greater visibility on national Web sites and maps that travelers frequently use. It also may help Lawrence land a much-talked-about National Abolitionist Museum, a project that has been informally proposed but currently is moving "very, very slowly," Billings said.

Its national scope may make it Lawrence's best chance to develop a destination driver, but Flannery said the community shouldn't put all its eggs in that basket.

"It would be a big help, but we'll have to see how far Lawrence gets with the possibility of being home to that," Flannery said. "There's still a lot of questions and a number of cities who are vying for it, and nobody yet knows where the money would come from."

Flannery said he'd like the community also to consider expanding its convention site locations. He believes there is a significant number of conventions that would like to locate in Lawrence if the community only had a center that could accommodate several thousand attendees.

"I think we are well-positioned for convention business because between the university and the downtown, I just know there are many groups that would love to have their convention in Lawrence," Flannery said.

But most convention centers do have a hard time paying for themselves, which means many are subsidized by tax dollars.

"That's a hard subject to even talk about during economic times like these, but it is nice to dream that someday we could maybe have something like that," Flannery said.

For now, though, Flannery said the community likely would have to think a little smaller.

"Now we probably have to focus on enhancing what we have," Flannery said. "But make no mistake about it, these are tough times, and until the economy gets back to normal levels, it will be a slower process than what we may like."

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