Eye on Hospitality: Increase in Tourism a Boon for Restaurants and Hotels

Eye on Hospitality: Increase in Tourism a Boon for Restaurants and Hotels

By Paul Schlienz

What’s good for tourism is good for hospitality, and what’s good for hospitality is good for tourism.

“Tourism remains an important driver of restaurant industry sales,” said Hudson Riehle, the National Restaurant Association’s senior vice president of research. “Culinary experiences can add value to any trip, whether stopping at a roadside café or seeking out food-centric destinations around the country.”

Tourism, of course, is also essential for the lodging industry.

“The hotel industry has been a bright spot in job growth leading the nation’s economic resurgence and improving the employment landscape, marking more than six years of consecutive job creation, with continued growth projected in the coming years,” the American Hotel & Lodging Association said in a statement. “Critical to generating and maintaining this growth has been, and will be, government and industry focus on increasing the flow of foreign visitors to the U.S. and recognizing the value of government, business, and leisure travel here at home.”

And tourism’s prospects are looking good for 2017.

According to the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO), a record high of 78.6 million international visitors are expected to enter the United States. For the next several years, steady tourism growth is expected, resulting in more than 94 million international travelers to the U.S. by 2021. Overseas visitors to the U.S. are projected to increase 28 percent during the 2015-21 period, with Mexican travelers increasing by 23 percent and Canadian visitors increasing by 9 percent.

Although international arrivals declined, in 2016, food and beverage spending continued at a higher than inflation-adjusted 3.4 percent rate on a year-to-date basis through 2017’s third quarter. If this trend remains unchanged, 2017 would be the seventh consecutive year of real growth of international travelers purchasing of food and beverages. Tourism business, however, was fairly static in 2016. Among the five major restaurant segments, only fine dining saw a net increase in travelers and tourists as a proportion of their business.

On the lodging side of the hospitality industry, hotel developers appear to be very confident about the future. According to STR’s U.S. Hotel Pipeline Report for March 2017, some 1,449 hotel projects, (equating to 190,764 hotel rooms), were under construction in the United States during March – a 24.4 percent increase over the same period in 2016, outpacing construction in other regions of the world.

“Construction was actually down a bit from [February], but we’re still nearing the room construction peak (211,000 rooms) reached in 2007,” said Bobby Bowers, STR’s senior vice president of operations. “Almost half (47.6 percent) of hotel room construction activity today is occurring in the major markets.”

With tourism being of such vital importance to the hospitality industry, it should come as no surprise to anyone that the Washington Hospitality Association is working hard to finally get Washington – the only without a state-funded tourism promotion program – to fund one.

“If you have a strong tourism image, it does a lot more than just bringing tourists to your state,” said Cheryl Kilday, board chair of the Washington Tourism Alliance, a 501 (c)(6) organization established in 2011 by the Washington Restaurant Association, Washington Lodging Association and other industry stakeholders. Its mission is to advocate, promote, develop and sustain the economic well-being of Washington’s tourism industry.

“A strong tourism industry in Washington will also help encourage businesses to locate here, will help businesses recruit employees and it will help recruit university students from other states and countries,” said Kilday. “We need to be using all our resources to be saying ‘Washington! Washington! Washington!’”

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