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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
Source: D.K. Shifflet & Associates
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
Source: D.K. Shifflet & Associates
State of Origin by Season
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
Source: D.K. Shifflet & Associates
State of Origin by Season
Summer
0.0%
10.0%
20.0%
30.0%
40.0%
1997-1999 1998-2000 1999-2001
Montana Washington California Texas Minnesota
Source: D.K. Shifflet & Associates
State of Origin by Season
Fall
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1997-1999 1998-2000 1999-2001
Montana California Washington Idaho Colorado
Source: D.K. Shifflet & Associates
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
Source: Smith Travel Research
% Change Over Previous Year
Average Daily Rate
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
Source: Smith Travel Research
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
Source: Smith Travel Research
% Change Over Previous Year
Revenue per Available Room
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Source: Smith Travel Research
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
Source: Smith Travel Research
% Change Over Previous Year
Revenue
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
Source: Smith Travel Research
Revenue
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Source: Smith Travel Research
% Change Over Previous Year
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
Source: Smith Travel Research
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
Source: Smith Travel Research
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
Source: Smith Travel Research
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.