City’s hotel occupancy suffers July dip, but remains up for the year

The hotel occupancy rate in Indianapolis dropped in July, but Visit Indy CEO Leonard Hoops said he isn't pushing the panic button. Instead, he’s looking for good times ahead.

The rate dropped from 82.1 percent in July 2015 to 74.5 percent in July 2016 but remains up for the entire year.

Hoops explained to the city’s Capital Improvement Board Friday morning that the primary reason for the decline in July was the movement of Gen Con’s massive gathering at the Indiana Convention Center from July last year to August this year.

“I would expect to see a big increase in hotel occupancy in August,” Hoops said, adding that the data hasn't been compiled yet.

But the data available for the first seven months of the year show the local hotel industry is bustling.

Through July, downtown hotel occupancy is 76 percent, compared to 72.8 percent for the same period a year ago, according to Visit Indy.

“That’s without Gen Con,” Hoops emphasized. “When we add in those numbers in August, we’re going to see a bigger boost.”

Gen Con drew 60,819 to Indianapolis for the annual gaming convention Aug. 4-7. The show, which is one of the city’s biggest conventions, had an economic impact of more than $70 million, according to Visit Indy.

Through July, hotel occupancy throughout Marion County is 72.7 percent, up from 70.4 percent during the same period a year ago.

“Overall hotel revenue is up 7.1 percent this year compared to last year,” Hoops told the CIB. 

That means hotel taxes—which are a big part of the CIB’s funding—also is up about 7.1 percent so far this year compared to 2015.

Since the JW Marriott and the Indiana Convention Center expansion opened in 2011, the number of hotel rooms in Indianapolis has declined 4.5 percent, prompting some of the city’s biggest tourism clients and corporate citizens to call for an expedited reversal of the trend, IBJ reported last month.

According to Visit Indy, the city has 1,043 fewer hotel rooms here than it did just five years ago—essentially wiping out the gains made when the JW opened with its 1,005 rooms.

The city’s ability to maintain occupancy rates at or above 70 percent is likely to attract more hotel developers to the city, Hoops said.

The long-term future is looking bright in terms of hotel room occupancy, Hoops said. 

Visit Indy so far this year has booked 574,000 hotel rooms into the future, ahead of its goal of 517,000 for this point in the year.

Visit Indy booked 904,717 hotel room-nights last year, beating the 2014 record of 880,552 room nights by 3 percent. Conventions and corporate meetings are often booked years in advance, so the 2015 bookings count rooms for conventions and corporate meetings scheduled through 2027, but the vast majority of them will be used by the end of 2020.

But hospitality officials don't expect to set another record this year.

“After back-to-back record setting years, based on our current convention-booking pace through August, we will most likely end 2016 closer to our goal of 775,000 hotel room-nights, ensuring a healthy tourism pipeline into the future,” Visit Indy Vice President Chris Gahl told IBJ in an email Friday.