New report looks at how much visitors spend in Lawrence, Douglas County; CVB leader weighs in on conference center idea
Visitors spend about $680,000 in Lawrence and Douglas County every day. As we all prepare for holiday visitors, here is a note to all the great aunts of the world: Some of that spending can be on gifts and not just lime green Jell-O.
The $680,000 per day figure is one of the big numbers in a new report for the Lawrence convention and visitors bureau. The CVB — its official name is Explore Lawrence — recently received its annual report that measured visitor spending for 2016. Here’s a look at some of its findings:
Visitors spent $248 million in Douglas County in 2016, according to the report by Tourism Economics. That calculates out to $680,000 per day, the report’s authors noted.
Visitor spending in Douglas County grew by 1.6 percent compared with 2015 totals. That was one of the poorer growth rates in recent memory. For example, 2014 and 2015 both produced growth rates of more than 7 percent.
However, CVB director Michael Davidson told me there is an explanation. For much of 2016, the city’s largest hotel — the former Holiday Inn that is now a DoubleTree — was under renovation. That renovation significantly reduced the number of rooms that were available in the community, he said.
Bars and restaurants are big winners in the visitor industry. Visitors actually spend more on food and drink than they do on lodging. They also spend more on gasoline than they do on lodging. The report estimates that visitors spent $69.4 million on food and beverages in 2016. They spent $66.8 million on transportation and fuel. Lodging amounted to $42.6 million in spending.
A quick note about the numbers, though. Some of you may take some of them with a grain of salt, depending on how you feel about estimates. (By the way, I’ll take salt for the lime green Jell-O. Something has to make it better.) It is tough for economists to precisely measure how much visitors are spending on food and gas and other items. After all, retailers don’t always know who is a visitor and who isn’t. So, economists use some formulas and spending averages to come up with those estimates. However, it is much easier to measure spending on lodging. Hotels in Lawrence charge a special sales tax on all rooms rented in the city. Those numbers do provide good evidence that Lawrence has seen significant growth in visitor spending in recent years. Here’s a look at the lodging numbers since 2011:
• 2012: $33 million, up 11 percent
• 2013: $34.1 million, up 3 percent
• 2014: $38.5 million, up 12 percent
• 2015: $42.5 million, up 10 percent
• 2016: $42.6 million, up 2 percent
The next time you wonder why so many hotels are being built in Lawrence, remember those numbers. Some would argue that City Hall should remember those numbers the next time it gets asked to provide a tax break to a hotel. But that is a complex argument (which is a polite way of saying the two sides will argue and probably still won’t agree in the end.)
Douglas County’s economy is more dependent on visitor spending than the average county in Kansas. The report estimates that 5.5 percent of all jobs in Douglas County are directly dependent on visitor spending. That’s compared with 4.7 percent for the state as a whole.
Douglas County continues to rank No. 5 out of the 105 counties in terms of total visitor spending. Douglas County captures 3.75 percent of all the visitor spending in the state. That’s down a bit from 3.77 percent in 2015. If Douglas County is serious about making tourism a bigger part of its economy, this might be a good number for leaders to track. It basically is Douglas County’s market share of the state’s tourism industry. While it dipped in 2016, it generally has been growing. In 2013 it stood at 3.53 percent. I wonder what a good goal for the county would be. Could it someday have 5 percent of all visitor spending in Kansas? What about 10 percent? What would have to happen to see that type of growth?
Davidson, the CVB director, told me he’s generally pleased with the numbers, given the amount of hotel rooms that were unavailable to visitors in 2016. He also shared thoughts on a few other issues. The big one on the mind of tourism executives is the idea of a downtown conference center and new hotel.
Davidson was cautious in his comments on that topic. He said the size of any proposed facility would be key. He said the community does run the risk of building a conference center too small. He said the facility needs to be large enough to differentiate itself from the existing conference space that is available at the Lawrence DoubleTree facility. Otherwise, he questions how much new conference business a center would bring to town.
“The challenge is whether we really are going to build a center that is going to be a game-changer,” Davidson said.
Davidson mentioned that a 50,000 square-foot conference center could be large enough to be a game-changer for Lawrence by attracting conferences that currently are too big for existing space in town. However, the latest proposal for a conference center in downtown — developers are seeking support to build on the site of the former Journal-World printing plant at the north end of downtown — is about half that size.
Another big issue with tourism leaders has been the growing popularity of Airbnb, the online platform that allows homeowners to rent out a room or their entire house to visitors. There have been several reports that Lawrence is the most popular Airbnb location in the state, which has created concerns about what that will do to Lawrence’s hotel market.
Davidson said the lodging industry had some of its concerns eased after a deal was struck requiring Airbnb to charge it customers a transient guest tax. That deal began in February. Prior to the deal, Airbnb customers weren’t paying the special sales tax that is charged on hotel rooms in the city.
That doesn’t mean hotel operators love the idea of Airbnb, but Davidson said the market is now adjusting.
“We can’t kill it,” Davidson said. “It is a new reality.”
Davidson estimates that Airbnb properties increase the availability of rooms for rent in Lawrence by 80 to 90 rooms on any given day.
“It is kind of like having a new, midpriced hotel in town,” he said.