Wait ‘til next year.
That oft-heard line from fans of major league baseball teams that fall short of World Series championships also is applicable to Carson City’s lodging industry and economy. It’s not that this year is bad, but a report to the local Convention and Visitors Bureau board, coupled with industry wide talk, shows the stars likely are aligning for a solid 2015. How come?
For starters, on the local scene 2015 is a year when the Legislature meets. That always helps both lodging and other facets of the state capital’s economy, at least compared with the even-numbered election years like 2012 and 2014. But there’s more to it than that. Slowly-but-surely recovering national and state economies and an upswing in the lodging economic cycle are involved as well.
Much like the economy itself nationally and in the state, the peak for lodging was in 2006 and the bottom came in 2009. The CCIM (Certified Commercial Investment Member) Institute reports things are looking up in lodging.
“It may take at least another two years before the (hotel construction) pipeline catapults forward,” according to an institute projection. “In the meantime, the next few years make for an attractive sweet spot for operators of existing open and operating hotels: growing guest room demand, rising pricing power, record-setting operating metrics, and little new supply coming online as the economy moves forward.”
Now back to that report on Carson City lodging. Joel Dunn, the bureau’s executive director, told his board average room rates and lodging’s revenue stream are both up compared with the past two years.
But as you might expect, in the first four months of 2014 occupancy rates for top hotels were down some or practically flat compared with the legislative year of 2013, while they were up markedly from 2012. To be specific, January-April occupancy rates were down 7.93 percent for the top 13 properties and up just 1.37 percent for the top five, compared with 2013; they were up 9.9 percent and 14.1 percent, respectively, compared with 2012.
So while average room rate and revenues went up, the occupancy rate lagged compared with last year. Ergo: if the general economy doesn’t tank next year, lodging and economic spin-offs from both the Legislature and other visitors bode quite well for the community. That relates back to the CCIM analysis that predicts “rising pricing power,” which is crucial in every industry and particularly in lodging.
Let’s end this column with a respectful yet burning question for Carson City residents. Will the Ormsby House open later this year, early next year...ever?
Wanna bet?
John Barrette covers Carson City government and business. He can be reached at jbarrette@nevadaappeal.com.