Some Destination Areas in Dire Straits. by John Hendrie

When we read about Las Vegas or Atlantic City, the amount of money is staggering and memorable.  When we read about major cities, we learn about Visitor numbers, hotel occupancy, maybe restaurant receipts – and they are all down.  Resort get-a-way locations have suffered accordingly.  Fortunately, the Caribbean and Florida have winter on the way, but that will not cover several dismal years preceding 2011.

CVB’s and Hospitality Associations, supported by their municipal and state budgets or memberships, are financially running light, budgets are reduced and tight, staff at minimal levels.  Almost all the articles I read about certainly the hotel industry are positive, yet with a veiled prognosis.  Who are these people, where are these hotels, who is really doing extremely well, rather than holding on for dear life.  This Halo Effect is the Emperor’s New Clothes. 

I would rather be positive than negative, but also honest.  Who is fooling whom?

However, there was one hard hitting article mid-November (By Steve Vaughan, "The Virginia Gazette") about the Williamsburg area, which laid their predicament right out there– publically.  Starting with a base of about 76 area Hotels, reportedly a third (25- 30) are behind in their mortgage payments and another 22 hotels are now listed as closed. Whoa! That certainly represents a chunk of accommodations in trouble.  What happened here in America’s largest Historical Playland?

Hotel-Motel Association president, Bill Scruggs, and co-chair of a task force on the hotel industry that was formed by the Greater Williamsburg Chamber & Tourism Alliance, gave his assessment.  "I don't think we're at a tipping point yet," he said. "Yes, the lodging industry in our destination is faced with very serious challenges, but the good news is many in the community are becoming more acutely aware of these issues, and a willingness to be involved. The Alliance lodging committee is a good example of local business leadership seeking to identify the problems and facilitate resources to resolve them."  Scruggs added that the problem was low occupancy and perhaps "a bit of oversupply". 

Hmm!  Perhaps some owners bought at the peak a few years ago and cannot manage their debt service.  Perhaps, discounting has affected rates.  Perhaps, the Hotel operators do not work together that well in the Williamsburg area.  No doubt, investment in renovation and property and product refresh will not take place.

What a shame.  This Historic Triangle of Virginia is a wonderful Destination, but the parties will need to unite to improve Visitor traffic, recreational, entertainment offerings and, most certainly, accommodations.  The honesty of the situation was surprising with the hard realities headlines.  But, that is where the appraisal starts and strategy evolves.  Best of luck retooling the Visitor Experience!

 


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