Chattanooga tourism stays strong despite economic recession

Chattanooga tourism stays strong despite economic recession

September 21st, 2011 by Carey O'Neil in Business Around the Region

Jolie Reardon, from left, Ashley Reardon, Wyatt Reardon and Dolly Vantrepotte squeeze together inside the viewing window for the penguin exhibit at the Tennessee Aquarium. Jolie, her children Ashley, 6, and Wyatt, 8, and her mother, Dolly, had the day off and decided to visit Chattanooga from Georgia.

Photo by Jenna Walker/Times Free Press.

Despite a down economy and skyrocketing gas prices, Chattanooga's hotel tax revenues, a yardstick for the tourism industry, increased by 18.6 percent between June 2010 and June 2011.

That figure put Chattanooga's tourism growth double that of competitors such as Atlanta; Asheville, N.C.; and Savannah, Ga., which all saw less than 10 percent growth, according to Bob Doak, president and CEO of the Chattanooga Convention and Visitors Bureau. Nationally, hotel tax revenue increased 10 percent, Doak said.

And preliminary numbers from Smith Travel Research show Chattanooga has continued that trend in July. Total hotel revenues are up 3.6 percent this July over last, STR's research shows.

Chattanooga's hotel tax revenue has increased three of the past four years, Doak said. At the Visitors Bureau's annual meeting Tuesday, he told about 1,000 local community and business leaders the industry's growth is largely in thanks to a national award-winning advertising campaign, the city's proximity to millions of potential tourists and local entrepreneurs bringing more business to the city.

"Any time you see a business that's up 18 percent in this economy, you know they're doing something right," said Sen. Andy Berke, D-Chattanooga. "Anything we can do to grow, that helps the region and the state."

Bob Doak

Several community leaders said the tourist-drawing events they run have seen steady growth.

Scott Smith, president of the Greater Chattanooga Sports & Events Committee, said those coming in for events often become repeat visitors to the region.

"A lot of times we hear people say, 'I didn't know Chattanooga had all that stuff,' and they'll plan their family vacations here," he said.

For the last few years, sports' economic effect has increased, averaging about $18 million annually, according to Smith. Two softball tournaments with an economic effect of about $3.5 million each already have come to Chattanooga this year, and he said that rising trend is likely to continue.

"From the county's perspective, we're here to follow the money," Hamilton County Mayor Jim Coppinger told members of the Visitors Bureau. "And you're where the money is."

But as the economy took a nose dive, it managed to pull down some tourism industries with it.

Andrew Kean, president of See Rock City Inc., said revenue and visitation dropped in 2008. Although numbers seem to be holding steady from last year to this, attractions are not pulling the same volume they once did.

"Summer attendance was relatively soft compared to projections," he said. "It coincided exactly with all the budget issues nationally and all the debt ceiling issues."

Kean said peer attractions in places like Gatlinburg have seen similar drops, and he expects the numbers to turn around with the economy.

"You don't see a ton of new businesses opening up in the hospitality and tourism industry, and I think that's because people are sort of waiting it out," he said. "Once some of these macroeconomic realities soften up, I think Chattanooga, because of aggressive marketing, because of a focus to innovate on products, we're going to be in a great spot."

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