montana tourism tax committee presentation information provided by smith travel research, d.k....

Montana Tourism Tax Committee Presentation

Information provided by

Smith Travel Research, D.K. Shifflet, Montana Department of Revenue

Presentation by Mike Scholz

Montana Innkeepers Association

Purpose

Identify origin of Montana’s hotel guest Determine purpose of trip (business or

leisure) Look at travel trends in Montana Examine hotel performance in Montana Conclusions

Montana Feeder Trends

Origin of Travel

and

Relative Percentages

State of Origin

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%

1997/ 1998 1998/ 1999 1999/ 2000 2000/ 2001

Montana Washington California Utah Colorado

Source: D.K. Shifflet & Associates

Inter-State Origins

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1997/ 1998 1998/ 1999 1999/ 2000 2000/ 2001

Spokane, WA Salt Lake City, UT Seattle-Tacoma, WADenver, CO Los Angeles, CA


State of Origin by Season

Winter

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

1997-1999 1998-2000 1999-2001

Montana Washington California Utah Arizona



Spring

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

1997-1999 1998-2000 1999-2001

Montana Washington Utah Idaho Colorado



Summer

0.0%

10.0%

20.0%

30.0%

40.0%

1997-1999 1998-2000 1999-2001

Montana Washington California Texas Minnesota



Fall

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

1997-1999 1998-2000 1999-2001

Montana California Washington Idaho Colorado


Business 1992-1994 1993-1995 1994-1996 1995-1997 1996-1998 1997-1999 1998-2000 1999-2001

Total 51% 49% 52% 49% 51% 48% 48% 52%

Montana 74% 74% 72% 63% 67% 67% 66% 67%

Out of State 38% 33% 40% 41% 42% 37% 36% 44%

California 11% 38% 50% 51% 25% 10% 33% 48%

Colorado 86% 63% 44% 45% 65% 73% 69% 68%

Idaho 56% 43% 55% 44% 60% 48% 58% 57%

Minnesota 30% 40% 30% 25% 16% 11% 21% 13%

North Dakota 36% 24% 46% 34% 26% 7% 24% 36%

Oregon 59% 35% 43% 41% 43% 34% 33% 18%

South Dakota 14% 20% 2% 0% 8% 11% 26% 0%

Utah 59% 53% 77% 83% 82% 80% 78% 89%

Washington 41% 35% 46% 43% 50% 40% 41% 50%

Wyoming 78% 46% 47% 46% 40% 38% 35% 49%

1992-1994 1993-1995 1994-1996 1995-1997 1996-1998 1997-1999 1998-2000 1999-2001

Leisure 49% 51% 48% 51% 49% 52% 52% 48%

Out of State 62% 67% 60% 59% 58% 63% 64% 56%

Montana 26% 26% 28% 37% 33% 33% 34% 33%

California 89% 62% 50% 49% 75% 90% 67% 52%

Colorado 14% 37% 56% 55% 35% 27% 31% 32%

Idaho 44% 57% 45% 56% 40% 52% 42% 43%

Minnesota 70% 60% 70% 75% 84% 89% 79% 87%

North Dakota 64% 76% 54% 66% 74% 93% 76% 64%

Oregon 41% 65% 57% 59% 57% 66% 67% 82%

South Dakota 86% 80% 98% 100% 92% 89% 74% 100%

Utah 41% 47% 23% 17% 18% 20% 22% 11%

Washington 59% 65% 54% 57% 50% 60% 59% 50%

Wyoming 22% 54% 53% 54% 60% 62% 65% 51%

Montana Visitor Room-nights

Business State of Origin1992-94 1995-97

1998-2000

1999-2001

Montana 51.5% 45.2% 52.8% 44.8%

Washington 9.9% 7.9% 7.3% 10.4%

California 1.7% 7.0% 4.8% 8.1%

Colorado 4.5% 3.7% 6.8% 6.0%

Utah 2.9% 5.2% 4.7% 7.2%

All Other 29.4% 31.0% 23.7% 23.6%

Leisure State of Origin1992-94 1995-97

1998-2000

1999-2001

Montana 18.3% 25.4% 24.6% 24.1%

Washington 14.6% 9.8% 9.4% 11.2%

California 14.3% 6.3% 8.8% 9.4%

Minnasota 4.3% 6.0% 4.3% 4.1%

Texas 4.8% 2.5% 4.6% 3.9%

All Other 43.7% 50.0% 48.4% 47.3%

Statistical Reliability

For the overall informat ion, there is a 1.5% +/- error rangeat a 90% confidence level.

For the seasonal informat ion, the error range is 2.2-3.7%+/-at a 90% confidence level.

Summary of latest reporting periods on Montana room nights Origin: 36% Residents - 64% Out of State Purpose: 52% Business - 48% Leisure Resident: 67% Business - 33% Leisure Out of State: 44% Business - 56% Leisure Total Business Rm/Nites - 44.8% Resident Total Leisure Rm/Nites - 24.1% Resident Note: Ave. persons/room

– Leisure Business

–

Montana Performance

Condition of the industry

Supply and Demand

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

9000000

Supply DemandSource: Smith Travel Research

Supply and Demand

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Supply DemandSource: Smith Travel Research

% Change Over Previous Year

Occupancy

45.0%

50.0%

55.0%

60.0%

65.0%

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Source: Smith Travel Research

Occupancy

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001



Average Daily Rate

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

$55.00

$60.00


Average Daily Rate

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001



Revenue per Available Room

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00


Revenue per Available Room

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001



Revenue

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000


Revenue

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%



Key Indicators for Montana

2.1% 2.1%1.8%

5.7%

3.0%

-1.0%

3.5%

0.9%

-2.7%

2.3%

3.7%

2.4%

5.9%

4.6%

-0.4%

-3.5%

-2.5%

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%

4.5%

5.5%

6.5%

Supply Demand Occupancy ADR RevPAR

1999 2000 2001


Occupancy by Day of Week

44.5%

55.8%

61.7%64.0%

62.4%65.0%

63.5%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

Sunday Tuesday Thursday Saturday

2001


Montana Supply Analysis

Economy20%

Independents63%

Upscale2%

Upper Upscale1%

Midscale w/o F&B1%

Midscale w/ F&B13%

Economy21%

Independents55%

Upscale1%

Upper Upscale1%

Midscale w/o F&B10%

Midscale w/ F&B12%

1987 2001


Summary of Supply increase exceeding demand increase Decrease in occupancy rates Decrease in room rate increases As long as total demand increases bed tax revenues

continue to rise Occupancy declines and ADR stagnation reduces

hotel industry profitability and income tax collections

Increased room supply increases property tax collections

Closing thoughts

36% of room nights are Out of State Leisure Guests

Out of State Leisure guests provide the incremental revenue that is needed to sustain profitability in many of Montana’s industries.

Effective Tourism Promotion is needed to drive needed incremental revenue to Montana businesses

Tourism might not drive the Montana economy, but it does make it possible to be profitable.

montana tourism tax committee presentation information provided by smith travel research, d.k....

Documents