Halfway between Memorial Day and Labor Day, it’s time to check on some key economic indicators this beautiful (but too dry) summer season.
First, business travel and meetings. This crucial segment helps fill in quieter mid-week periods and attracts lower-impact visitors more likely to travel in groups (fewer vehicles on the road) and participate in easier-to-manage organized activities. The news is good. The US Travel Association reports business travel is finally up, with volume expected to reach 81 percent of pre-pandemic levels this year. As of June, 89 percent of companies allow domestic business travel, and in-person meetings are their top planned business travel expense. In addition, conference spending should increase by four percent this year over pre-COVID 2019.
Locally the news is even better. Our Group Sales team had a robust FY22, booking 232 meetings in Park City with direct sales to hotels and venues of $15,816,665. The total economic impact was much higher (though uncalculated) when including visitor recreation, shopping, and other non-meeting activities. Meeting attendees racked up 36,551 room nights in FY22. For context, a look at pre-pandemic FY19 shows 186 meetings with a direct sales impact of just more than $13 million.
As measured by visitor-generated tax revenues, the economy continues to set records. Park City budgeteers reported record high sales tax collections entering FY23 this month. For example, March 2022 sales tax revenues (the last full month available) were 29 percent higher than March 2021. Transient Room Tax revenues in March were 51 percent higher than in March 2021 as average daily rates continued to climb.
The story is the same in Summit County: record high tax revenues spurred by strong economic activity. June 2022 Summit County Transient Room Tax collections were up an astounding 111.24 percent compared to June 2021.
Looking ahead, the latest report from DestiMetrics shows advance room bookings in Park City through October are averaging three percentage points higher each month than last year.
But red flags are popping up as the economy displaces COVID as the traveling public’s top concern. Longwoods International reports a record 31 percent say worries about personal finances will significantly affect their travel decisions in the next six months, up six points in just one month.
Gas prices are a critical factor, with a survey record 70 percent saying fuel costs will impact or greatly impact their decision to travel. Forty-four percent say gas prices could cut their number of trips or make them stay close to home. Thirty-eight percent say they may reduce their spending on retail purchases, 36 percent on entertainment & recreation, 28 percent on food & beverage, and 22 percent on lodging.
Inflation is a concern for everyone. In reporting out those record high tax revenues in June, Park City budgeteers noted that inflation will bear watching throughout the fiscal year. How inflation relates to travel and tourism has yet to be quantified, though the USTA reports airfare prices were up a staggering 22 percent in May compared to May 2019.
Small business faces other ongoing challenges. The USTA reports that 51 percent say they are still unable to fill job openings, while Longwoods says 52 percent of travelers expect pre-pandemic levels of service.
As the Chamber/Bureau prepares for our Annual Meeting August 15, we look forward to celebrating positive news and a new direction in sustainable tourism management, while keeping a focused eye on the big picture realities affecting our economic wellbeing.