The business of tourism
Members of the Immaculate Heart of Mary group from Mercer exit the bus and head into The Meadows Casino Thursday. Tourism brought in $750 million in direct spending to Washington County in 2013. The Washington County Tourism Promotion Agency wants to promote more overnight stays to continue to grow direct visitor spending here.
Members of an Immaculate Heart of Mary Church group from Mercer exit their bus Thursday and head into The Meadows Racetrack & Casino. Tourism brought in $750 million in direct spending to Washington County in 2013.
Members of the Immaculate Heart of Mary group from Mercer exit their bus Thursday and head into the Meadows Racetrack and Casino. Tourism officials want to promote more overnight stays in the county to grow already impressive direct visitor spending, which is now $750 million annually.
One of several bright spots in Washington County’s annual economic update delivered March 12 was the report on its tourism industry.
According to County Commissioner Harlan Shober, tourism accounted for nearly $755 million in direct visitor spending in 2013 – the latest figure available – supporting nearly 6,000 local jobs in tourism and hospitality.
During his presentation to about 200 members of the Washington County Chamber of Commerce, Shober noted that visitor spending has more than doubled since 2006, when people visiting the county spent $333 million.
The comparison to 2006 is significant, fixing a time when two major economic drivers – legalized gambling and the Marcellus Shale natural gas extraction boom – had yet to make their mark on the county’s economy.
“This was prior to the full development of such tourism assets at The Meadows, Tanger Outlets and the tremendous opportunities presented by the energy industry,” Shober said. “You can clearly see the positive impact these assets have on our economy.”
Keeping that momentum going is the job of the Washington County Tourism Promotion Agency, which merged in January 2014 with the Washington County Chamber of Commerce.
Jeff Kotula, who is president of both groups, said in a recent interview with the Observer-Reporter the tourism agency is continuing to promote some longtime projects like the Covered Bridge Festival, giving more attention and funding to attractions like the annual PONY League World Series, while introducing some new events, like the recently inaugurated Washington County Restaurant Week, and promoting the upcoming Marianna Canoe Race, a one-day event that has been drawing 3,000 people.
Since the merger, which saw the departure of longtime county tourism executive J.R. Shaw, the two agencies have meshed staff, now operating with a total of six people, who split time between chamber and tourism functions, Kotula said.
During the past year, WCTPA’s annual tourism guide was discontinued, replaced with the new “Inside Washington County” monthly magazine, which dedicates a spring and fall edition to tourism, with the remainder of issues focused on business.
Kotula said the merger of the two groups has prompted taking “more of a business focus” on tourism, using Google Analytics and other quantitative tools to determine where visitors are coming from and how much time they spend here.
Driving tourism’s success – and WCTPA’s budget – is the juncture of a 3 percent room tax and an inventory of hotel rooms that has continued to expand since the end of the last decade. In the midst of the natural gas boom that drove the buildout of Southpointe II, and the addition of major tourism assets on Racetrack Road, 1,100 new hotel rooms were built in the county between 2009 and 2014, with many of them sited between Racetrack Road and Southpointe. The additional units bring the county’s total room count to 2,256, according to STR Inc., a Hendersonville, Tenn., company that tracks hotel industry performance across North America.
In 2014, Washington County’s room tax produced $1.7 million, with all but 2 percent of that amount going to WCTPA. (The county’s treasury retains the lesser amount for administration). Kotula said he expects the room tax proceeds will go slightly higher this year.
Since 2010, the increase in rooms has consistently kept pace with demand from businesses and leisure travelers, with STR tracking annual room occupancy rates between 75 and 80 percent. According to STR data, the local occupancy rates soar above the current average U.S. room occupancy rate of 62.3 percent.
But reductions in 2015 capital spending plans announced at the beginning of the year by all of the natural gas exploration and production companies in the area point to less demand for rooms from the industry this year.
STR’s February reading of Washington County hotel rooms, released Wednesday, found occupancy rates at 67.4 percent, higher than January’s rate of 66.9 percent, but below 2014’s overall average of 80.6 percent.
The recent lower occupancy trend could be weather-related; STR’s 2014 data shows January and February rates at similar levels, before ramping up to the high-80 percentile by summer, and peaking at 90 percent in August.
“That’s something we’re keeping an eye on,” Kotula said of gas industry spending cutbacks.
Even with the potential reduction in demand for rooms by the energy sector, Kotula noted that the county’s economy is well-diversified, with other non-energy businesses, such as Ansys and Mylan that are thriving, and continuing to have a demand for rooms.
Sean Sullivan, general manager of The Meadows Casino, the county’s largest tourism attraction that draws 5 million visitors a year, also believes that hotel rooms here will continue to see above-average occupancy rates, even with a downturn in demand from the energy sector.
“I don’t think it will hurt the immediate hotel area of Racetrack Road,” or hotels in Southpointe, Sullivan said Thursday, agreeing that the mix of guests is from business and leisure sectors.
He added that The Meadows, which is adjacent to the new 155-room Hyatt Place hotel scheduled to open next month, recently purchased 5,000 room nights at the venue for this year for its high-roller guests.
Attracting leisure travelers, particularly families, to Washington County as a destination, is a major thrust of the agency.
“We want to get the leisure people to stay overnight,” Kotula said, pointing to the county’s major attractions – The Meadows, Tanger Outlets, and numerous historical attractions ranging from the Meadowcroft Rockshelter and Historic Village, Pennsylvania Trolley Museum and the Whiskey Rebellion Festival to the annual Covered Bridge Festival.
While previous agency goals focused on bringing visitors from Ohio cities, as well as central and northeastern Pennsylvania, Kotula said it has tweaked the market to travelers within a two- to three-hour drive of the county, and has added promotional emphasis on travelers from West Virginia.
The agency also attended an annual “Heartland” tour bus convention in Chicago this winter to meet with operators who can bring tours here.
Sullivan, who also attended the Chicago convention for The Meadows, conceded that with the legalization of gambling in Ohio, the casino has seen tour bus business disappear from that state, but he championed the pursuit of tours because they generate overnight stays.
“If we had our way, we’d have more out-of-state buses,” he said. “The further you come, the better it is for us and for our county, because (those tourists) are going to make an event, a mini-vacation, out of it.”
A major boon from the hotel tax to WCTPA over the past several years has been its ability to provide grants to the county’s nonprofits involved in tourism attractions. The agency recently announced its application period for the 2015 grants program, which help awardees in promoting their assets to the leisure traveler.
The annual allotment is a minimum of 10 percent of the total proceeds from the hotel tax, but Kotula said the amount can go higher, depending on what’s being proposed by the applicants.
“We look at the quality of the projects” being vetted, he said, noting that last year’s $140,000-plus in grants included money for the Washington Farmers Market as well as for the Trolley Museum.
“We gave out more because there were great projects,” he said. “Tourism dollars are tax dollars, so we have to look for the best ways to spend these dollars.”
David Scofield, director of Meadowcroft Rockshelter and Historic Village, said the grants have helped his attraction in multiple ways, acknowledging that Pennsylvania budgetary constraints eliminated tourism assistance some time ago.
“Meadowcroft has been awarded tourism grants for both marketing and bricks-and-mortar projects,” Scofield said, adding that 85 percent of the attraction’s 17,000 annual visitors come from outside the county.
He said some of Meadowcroft’s recent grant awards were spent marketing itself in Cleveland and northeast Ohio, while bricks-and-mortar grants, coupled with grants from the county’s Local Share Account and the state Historical Society, have helped to improve paths and to make repairs on the Pine Bank covered bridge, the main entrance to the village.
WCTPA is also in the midst of adding or expanding several assets aimed at the leisure visitor.
Last year, Kotula said tourism spent more money to promote the PONY League World Series last year. The $65,000 outlay included billboards attached to trucks that were parked outside of PNC Park during Pirates game days to entice baseball fans to drive to Washington to see a game.
“It’s no great secret that (attendance) has plateaued for several years,” he said. He said the agency also used KDKA’s broadcast and marketing department to promote the weeklong event, adding that the station “has shown very strong interest” in continuing with the project this year.
“Eventually, we want to get it on a par with the Little League World Series,” Kotula said, an event that is televised from Williamsport to a national audience each year.
While acknowledging it will take time to achieve that goal, Kotula said, “I know it’s aggressive, but you have to be aggressive with it.”
Kotula also noted that the agency met with the various local groups that support the annual Covered Bridge Festival to determine their needs. He said he was also interviewed recently by the Wall Street Journal for a future story on bridge festivals.
“There’s a lot of great stuff going on here we want people to get excited about,” he said.