Quarterly Report Part 1: President’s Report for October-December 2010

Springfield’s hotel industry continued its slow recovery from the recession during the second quarter.  After eighteen consecutive months of decline that began in January 2009, room demand has now increased for six consecutive months.  Unfortunately, recent increases have not erased the deep decreases experienced in 2009 and the first half of 2010.

According to local hotel statistics collected by the bureau, the number of occupied hotel rooms (room demand) in Springfield during October, November, and December 2010 increased from 240,500 for the same period last year to 250,904 this year, an increase of 10,404 occupied rooms or 4.3 percent.  For the calendar year, occupied hotel rooms increased from 1,092,645 to 1,101,879 this year, an increase of 9,234 rooms or 0.8 percent.  Unfortunately, the year-to-date decrease in room demand in 2009 compared to 2008 was 90,019 rooms or 7.6 percent.

Because of the recent increase in room demand, many hotels and motels are trying to increase average daily rate (the average amount hotels charge for sleeping rooms).  After four consecutive quarters of decreases, average daily rate has increased during the first two quarters of 2010/11.  During the second quarter, average daily rate increased to $65.38 from $64.38 for the same period last year, an increase of $1.00 or 1.6 percent.  For the calendar year, average daily rate decreased from $66.39 to $65.87, a decrease of $0.52 or 0.8 percent.

As a result of the increase in occupied rooms and average daily rate, total room sales increased by 5.9 percent during the second quarter to $16,402,864 from $15,482,239 for the same period last year.  For the calendar year, room sales increased slightly from $72,535,730 to $72,580,301, an increase of $44,571 or 0.1 percent.

Citywide hotel occupancy, average daily rate, and market mix statistics are recorded monthly by the bureau with the cooperation of hotels and motels in Springfield.

Road construction on U.S. 65 continues to contribute to the decrease in visitors to the bureau’s Tourist Information Center on U.S. 65 and Battlefield Road.  During the second quarter and compared to the same period last year, traffic decreased 19.5 percent to 4,309.  For the calendar year, traffic decreased 31.4 percent to 20,504.  Traffic at the Airport Visitor Information Center also decreased 13.2 percent to 5,338 during the second quarter and dropped 4.3 percent to 22,901 for the calendar year.  Total passengers enplaned and deplaned at the Springfield-Branson National Airport decreased 1.7 percent during the second quarter to 194,057.  For the calendar year, airport traffic dropped 1.9 percent to 796,251.

Thanks to the economic recovery, revenue comparisons with last year and with the original budget are both positive.  Year-to-date lodging tax collections compared to the original budget are up 5.3 percent.  Compared to actual collections from last year, the lodging tax is up 6.7 percent.

The State of Missouri continues to suffer as a result of the recession and significant budget reductions will be made again this year.  According to legislation, the Division of Tourism should have a FY12 budget of nearly $30 million, but Governor Jay Nixon has recommended a $13.4 million budget, the same budget as last year.  Whether the legislature will agree with this recommendation remains to be seen.  The bureau has been notified the FY12 Cooperative Marketing Program has already been scaled back.  Instead of the ability to apply for $580,000 in matching funds, the maximum the bureau can apply for during the FY12 fiscal year is $450,000, a reduction of $130,000.  Since the maximum the bureau can apply for during FY12 has already been reduced but the FY12 budget has not been finalized, there are no guarantees the amount will not be reduced further.

Springfield hosted a quarterly meeting of the Tourism Commission in December.  The Tourism Commission is the governing body for the Missouri Division of Tourism and most members are appointed by the governor.  Division of Tourism staff and tourism officials from around the state attended the meeting, which will again be held in Springfield in June 2011.

As previously reported, the City of Springfield, John Q. Hammons Hotels & Resorts, and the bureau have agreed to share the cost of a competitive assessment study to determine what Springfield needs to be competitive in the meeting and convention market.  A task force made up of representatives from all three organizations and the general public was appointed and a Request for Proposals to conduct the competitive assessment was sent to thirteen companies.  Seven companies responded with proposals and the task force invited three companies to make formal presentations in November.  Hunden Strategic Partners was selected to conduct the study, which should be complete in March.  After the study is complete, the task force is charged with analyzing the study and making recommendations to City Council on a course of action for extension and/or revision of the development agreement between the City and John Q. Hammons Hotels & Resorts to build a hotel on the vacant lot adjacent to the Expo Center.

A budget revision was approved by the board during the second quarter.  Although lodging tax revenue was increased as a result of the improved economy and miscellaneous revenue was increased to accommodate partner payments for the convention competitive assessment, total revenue was decreased to address changes in when reimbursements for the Division of Tourism’s Cooperative Marketing Program are paid.  Significant changes to expenses include a decrease in payroll expenses because of open positions, a decrease in advertising expenses as a result of cutbacks to the Cooperative Marketing Program, an increase in market research to accommodate the convention competitive assessment, and an increase in capital expenses as a result of a computer hardware and software upgrade.

During the second quarter, the bureau purchased and installed Destination 3000 (D3000), a web-based software system created specifically for CVBs.  This software system will allow the bureau to combine nearly twenty separate databases and spreadsheets to increase efficiency and control variables that could create data errors.  The software will house a master contact database, sales call tracking, generate sales leads and contracts, track and manage visitor inquiries and act as the back-end of the bureau’s website.  In addition, the software will allow industry partners to maintain their contact information, get notification of events, and respond to sales leads and advertising proofs online with a unique login and password for each partner.  The entire bureau staff participated in a four-day training session in December and continues to input data and train internally on the system.

There were several board and staff changes during the second quarter.  Due to term expirations, John Ford, Greg Horton, and Jerry Harmison left the board at the end of December.  Mr. Horton and Mr. Harmison were Chamber of Commerce appointments and will be replaced by Ms. Meghan Stack, owner of Staxx and Jelly Beans, and Mr. John Wilson, regional president of US Bank.  After serving seven years on the board, Mr. John Ford will be replaced by Ms. Melissa Dallas, department head of the Hospitality and Restaurant Administration department at MSU.  Ms. Dallas was appointed to a three-year term by Mayor Jim O’Neal, who also reappointed Scott Tarwater and Erik Fjeseth to their second three-year terms.

Ms. Patty Becraft, director of administration/operations, submitted her resignation in September to start her own real estate and IT company.  Ms. Colleen Hargis was hired as her replacement and began her employment in October.  Ms. Hargis has extensive accounting and IT experience.  Ms. Melissa Divincen was promoted to partner development manager for the bureau from her prior position as assistant director of the Sports Commission.  Ms. Rebecca Moore, formerly with the American Cancer Society, was hired as assistant director of the Sports Commission to replace Ms. Divincen.

After a staff retreat in September, bureau staff and management began implementation of a new corporate culture for the bureau.  Patterned after the corporate culture of Netflix, the culture is based on freedom and responsibility with the standard of employing and developing high performance individuals throughout the organization.

Other general activity of the bureau staff during the second quarter included hosting a meeting and luncheon for past bureau chairs, attending the Governor’s Conference on Tourism in St. Louis, hosting a holiday reception for bureau volunteers, and presenting Mr. John Williams (a volunteer at the Tourist Information Center for twenty-one years) with the first annual Volunteer of the Year Award.

Bureau administrative staff continues to represent the bureau on the Springfield Hotel/Motel Association; Greater Springfield Area Sports Commission; the Urban Districts Alliance; the Missouri Association of Convention and Visitor Bureaus; Missouri Division of Tourism’s Public Relations and Cooperative Marketing committees; Bass Pro Shops Fitness Festival; Partnership for Sustainability; Springfield Missouri Employers Committee; Travel & Tourism Research Association; Ozarks Area Postal Council; International Association of Administrative Professionals; and the Missouri Travel Council.

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Tracy Kimberlin is the President & CEO of the Springfield, Missouri, Convention & Visitors Bureau

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