'Drive' market shields Gwinnett from airfare hikes

A Travel Industry Association forecast that reports an uncertain economic climate is leading business travelers to change behaviors would have an affect in Gwinnett County and its 99 hotels if it becomes true. Business travelers are the strongest market for the city's hotels, according to the Gwinnett Convention and Visitors Bureau.

The forecast said leisure travel is stable.

The outlook for business travel is for a 3.7 percent decline in volume projected for 2008 and another 2.7 percent decline forecasted for 2009, according to TIA's annual travel forecast. The forecast said companies are making decisions to scale back in the current environment and business travel is no exception. Business, meeting and convention travel volume is expected to begin to recover in 2010.

Caryn McGarity, CDME, executive director of the Gwinnett CVB, said as the county is known as a "drive" market, with more visitors driving than flying, airfare hikes and the distance from Hartsfield-Jackson International Airport don't have as big an affect on the hospitality industry here.

New hotel construction will be stalled until the financial markets strengthen and occupancy will dip slightly. But the diversity of the hospitality industry in the county – shown by usage of Gwinnett Arena ranging from arena football and hockey to faith-based conventions – has a huge affect on the county to the tune of $1 billion.

"By no means is the sky falling," said Suzanne Cook, senior vice president of Research for the Travel Industry Association. "After years of growth, we're now looking at modest declines. The travel industry can manage the downturn, but it is in the country's interest to stimulate travel as one of the best means to stimulate our economy."

Alpharetta Convention and Visitors Bureau President and CEO Janet Rodgers was asked what this means for Alpharetta:

How will Duluth, Suwanee and the rest of Gwinnett be affected by this?
McGarity: We anticipate that across Gwinnett, we'll mirror much of the Atlanta and national trends – we anticipate that occupancy will be down slightly county-wide, but that rate will remain steady or down only slightly. PKF Consulting, in their recent Lodging Outlook forum, reported that Gwinnett Place North (includes I-85, Duluth, Suwanee, etc) is expected to see the strongest increase in REVPar (revenue per available room) in metro Atlanta at 3.5 percent next year. That being said, much of that is attributed to the fact that hotels are keeping 'rate integrity' in spite of lower occupancies, and that supply has balanced out more than in the past – there is not a lot of new hotel construction in our market. We are seeing some of the same national trends – even when people are still traveling, they are spending less while they are here – holiday party bookings are way down, for example, as companies are cutting back because of the economic uncertainties.

Many hotels that are in the pipeline will probably remain so in 2009, and we won't see any or very limited movement on hotel construction in the upcoming year. We anticipate that if the credit/financial markets strengthen, then a percentage of those projects will move forward in 2010.

Will we have the same type of travel volume as these national predictions? Do we typically?
McGarity: Yes, our projections are very similar to metro Atlanta but there are some primary differences as we are much more of a drive market than downtown – so if the cost of airfare, etc becomes prohibitive, it doesn't have as much of an impact on us because we are much further from the airport.

What are our strengths in hospitality? Is it the business customer?
McGarity: Our business traveler market has always been our 'bread and butter' but over the past several years, our market has diversified considerably. However, we anticipate that the business traveler and or business training will continue to drive our market during the week. A lot of people don't realize how much the tourism industry plays a part of Gwinnett's economic engine – we have 99 hotels, the Gwinnett Center & Arena and our hospitality industry generates almost $1 BILLION dollars in economic impact annually.

The Arena at Gwinnett Center is a great example of how we have been able to diversify. Many residents may think of it as the place to see the Gladiators play, or see a great concert. However the Arena is the venue of choice for a number of large regional and national faith-based conferences that provide a substantial amount of room nights for our area – meetings including Salvation Army national meetings, Injoy Catalyst Conferences (youth) and the Jehovah's Witness meetings. Conventions such as these can book Gwinnett County to 80 or 85 percent occupancy while they are here. The Arena is also a prime destination for regional and national sporting events – Georgia State events; SEC and for next year, the NCAA Women's Round I and II Basketball games. We created the Gwinnett Sports Commission five years ago to bid, draw and create sporting events and they have been incredibly successful, working to bring more than 20 sporting events to Gwinnett annually. Our strengths are that we are a drive market; an affordable suburban destination with easy access to downtown; Lake Lanier and Stone Mountain and have a strong reputation for customer service and family-friendly destination.

We have also diversified to increase our exposure to the family reunion market. Gwinnett County Parks & Recreation were recently named as the No. 1 parks and recreation department in the U.S., and our top-notch parks and major emphasis on marketing and selling to the reunion market – we are up over 35 percent in family reunion bookings this summer over last, and we anticipate another increase next year.

Where does the leisure travel sector fall in our area?
McGarity: While it is not as big of a piece of the pie as business travel, it is very important to our hotels. Our primary leisure visitors are visiting friends and family; weddings; sports; reunions and day trips. A couple of very new and exciting leisure draws will be the new Gwinnett Braves stadium that will open in April 2009; we anticipate that the Gwinnett Braves will draw a certain percentage of its crowds from outside of the Atlanta MSA, and that is another great reason for excitement. One new development that has been perhaps a pleasant surprise is the draw of the BAPS Hindu Temple in Lilburn – it has drawn not only thousands of visitors, but new tours and considerable media coverage.

What are the GCVB, local hotels and others doing to counter any anticipated cutbacks?
McGarity: We are being pro-active and creative and working to anticipate any issues that may arise. We are offering incentives (i.e. gas cards) to meeting planners that submit requests for meeting proposals that will generate more than 200 room nights for our hotels; the Gwinnett Center is offering seasonal 'hot deals' for new bookings; many hotels are creating value packages and we have started applying for a number of grants to offset anticipated sponsor or budget cutbacks.
- www.gwinnettherald.com

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