Q&A on the summer outlook …
What was the bottom line on last year’s summer season?
Northcross: Visitors to the Route 6 welcome center were up 2 percent, visitors to the Route 25 center were up 14 percent, and Web site visits were 13 percent above year-before levels. The room occupancy rate in 2006 averaged 45.8 percent, compared with 42.8 percent in 2005. The summer was flat, but the fall season continued to be growing. Still, the average room rate in the fall is about $94 on the Cape, but $126 at the national level. There is an opportunity here for us.
Roginsky: For the Cape and Islands, room occupancy peaked in 2000 at 57 percent. Last year, it was about 52 percent (in the summer), but that does not include B&Bs – only motels and hotels. The average summer room rate dropped to a low in 2003 of $132, increased to $135 in 2005 – but dropped to $134 last year. The revenue per room, however, has continued to increase.
How is 2007 looking?
Northcross: The trends for the Mid-Cape and Lower/Outer Cape appear strong. We are seeing growing opportunities to build tourism around special events and around recreation like boating, fishing, kayaking and whale watching. At the same time, interest in the beach and shopping is dropping a little bit.
Roginsky: Nationwide, the only sector of tourism to drop in demand is resorts. Trends are up for urban, suburban, airport, small metro and interstate accommodations. The New England lodging industry trails the U.S. average. But Massachusetts is the only New England state that shows stronger growth than the U.S. average.
For the Cape, we remain weather-dependent. Beyond that, we see improved demand here by groups. There is a stable if not decreasing supply of rooms, but that is due to a lot of hotels renovating. That means improved product. The completion of the flyover should help too.
We forecast occupancy up 1 percent to 2 percent; average room rates up 4 percent to 6 percent; and revenue per room up 5 percent to 8 percent.
Are there particular opportunities on the horizon?
Northcross: The shoulder season. About 70 percent of visitors stay in hotels and motels in the summer, but that drops to about 61 percent in the summer because more people rent private homes. In the fall, the number nearly reaches 70 percent for hotel and motel occupancy. Spring and fall visits tend to be for one or two days (and they are organized around events like Windmill Weekend or the Scallop Festival).
Currently, our core visitor is 46 years old or older, married and traveling with family. We need to target the 18-45 age group. That is our future market. We must demonstrate to a much younger demographic why the Cape is fun and exciting.
What are the leading challenges facing tourist businesses this summer?
Roginsky: Higher operating costs, especially energy, insurance and labor costs, as well as the supply of labor.
What are the state Office of Tourism and Travel and the Cape Cod Chamber of Commerce doing to promote the summer season?
Northcross: The chamber is focusing on the nearby domestic market with the slogan, ‘A short trip to far away.’ We are targeting New York, Connecticut and New Jersey by print and cable. We are developing podcasts and newsletters to 10,000 subscribers. We also are growing our online booking resources. Our official guidebook is available online.
MOTT and the state branding campaign focuses on ‘With so much to do in Massachusetts, one fun thing leads to the next.” Thus, it is branding kayaking and fine dining; outdoor activities and nightlife; museums and beaches.
Wendy Northcross is CEO of the Cape Cod Chamber of Commerce; Rachel Roginsky is a principal for Pinnacle Advisory Group in Boston. Their forecast was presented at BizWiz 2007, the chamber’s annual conference focusing on tourism and recreation.
Published in Cape Business May/June 2007
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