Tourism outlook for Chattanooga area hopeful

Tourism outlook for Chattanooga area hopeful

May 28th, 2011 by Ellis Smith and Carey O'Neil in News

Sharon Freeman looks through a brochure for the Incline Railway attraction with her friend Kenny Rolin inside the new visitors center on I-24 East in Chattanooga. Freeman and Rolin, who are visiting from border of Alabama and Florida, planned to experience many of the popular attractions during their four-day stay in Chattanooga. Staff Photo by Jenna Walker/Chattanooga Times Free Press


Chattanooga tourism in 2010

• 7,800: Jobs supported

• $19 million: Sales tax revenues

• $750 million: Money brought into Hamilton County

Source: Chattanooga Convention & Visitors Bureau

Memorial Day travel by the numbers:

• 0.2 percent - Nationwide increase in Memorial Day travel

• 34.9 million - Number of Americans expected to hit the road for Memorial Day

• 31 percent - Percentage of projected Memorial Day 2011 tourists with annual incomes less than $50,000

• 41 percent - Percentage of Memorial Day tourists in 2010 with incomes of less than $50,000, a 10 percent decrease

• 6 percent - Increase in middle-class travelers this year

• 5 percent - Increase in upper-class travelers this year

• $1.01 - Increase in the price of a gallon of unleaded gas over Memorial Day 2010

Source: American Automobile Association

Average gas prices for regular unleaded:


• Current: $3.61/$3.81

• Month ago: $3.68/$3.88

• Year ago: $2.60/$2.76

• Highest recorded: $3.97/$4.11

Source: American Automobile Association

With gasoline prices up and storm recovery straining her wallet, Patty Goodwin started looking closer to her home near Birmingham, Ala., for vacation ideas.

She and her 6- and 7-year-old boys are headed to Knoxville to celebrate Memorial Day weekend with family, and the three plan to come back to Chattanooga in a few weeks.

"We're staying closer to home rather than going to Florida this year," she said. "They're out of school. They want to do something."

This Memorial Day weekend kicks off the busiest time in an industry that brought $750 million to Chattanooga last year: Tourism. Despite high fuel costs, storm recovery and a still-sluggish economy, officials are projecting this will be a good summer for both Chattanooga and the state.

"The outlook is good," said Renuka Christoph, senior news bureau editor at the Tennessee Department of Tourist Development. "Tennessee's just very traveler friendly in that it's very scenic and has lots of attractions."

The American Automobile Association projects Memorial Day travel to increase this year, with an 0.2 percent nationwide bump and a larger, probably double-digit bump in tourism in Chattanooga over 2010.

But many recession-wary tourists, who are drawn to the inexpensive cost of a visit to Chattanooga, may stay home in greater numbers this year because of the higher cost of travelers, according to the AAA.

And that could have serious repercussions for the Scenic City.

"Whether you're in the hospitality business or not, your lives and your wallets are touched by tourism," Chattanooga Convention and Visitors Bureau President Bob Doak said.

Projections compiled by AAA show travelers with a yearly household income of less than $50,000 will make up only 31 percent of total travelers this year, down from 41 percent in 2010.

But the loss will be offset by middle- and upper-class tourists, whose numbers should increase six percent and five percent, respectively, said Brent Hubele, vice president of travel for AAA Auto Club South.

"Compared to last year, we have seen a shift in traveler demographics as a result of increased gas prices," he said.

Doak, however, said he hasn't seen such a shift happening in Chattanooga. Area attractions and hotels reported increased sales of up to 20 percent over the recent spring break, and he anticipates a similar but smaller jump this weekend.

"Everybody seems to be doing well," he said.

This will be the first summer since the CVB's Visitors Center relocated from its original location above TGI Friday's on Market Street to the ground level of the renovated Bijou Theater on Broad Street. Since the CVB opened its first center in 1993, tourism's economic impact has nearly tripled, according to the bureau.

Doak expects the location in the middle of Chattanooga's entertainment district will increase traffic by about 25 percent from the roughly 225,000 people who already use the center to gather entertainment info and book hotel reservations annually.

Hotels downtown reported occupancy rates hovering around 90 percent for summer's kickoff, which Hampton Inn & Suites Chattanooga Downtown Manager Jeff Hollis called "definitely pretty normal."

Katrina Schleif, operations manager for the Hilton Garden Inn, said that, while she's at 80 percent occupancy right now, the number of walk-ins and last-minute reservations should push her to 100 percent, if last year is any indication.

"We're on track to sell out this year," she said.

Even the DoubleTree Hotel Chattanooga, which caters more to business customers, is at 80 percent occupancy, according to hotel officials.

With Chattanooga less than a 21/2-hour drive from 10 million potential visitors in such cities as Atlanta, Nashville and Birmingham, Doak doesn't put much stock in the rise and fall of gas prices when it comes to Chattanooga's popularity to the summer crowd.

"If you're looking at a 21/2-hour, 150-mile driving radius while getting 20 miles to the gallon, it's insignificant in terms of dollars," he said. "The barrier used to be $3.50 a gallon, and we were told we would see precipitous drop in tourists, but that did not come true."

More important for Chattanooga's potential tourists, Doak said, are their collective gut feeling about the economy as a whole: consumer confidence, job security, and weather are the bigger drivers of holiday travel.

Still, in the tourism industry, nothing is ever for certain, and Doak said he takes nothing for granted.

"You can make predictions based on consumer confidence, weather and past performance, but sometimes at the end of the day you never know what makes someone make the decision to travel," Doak said. "Tourism is like the stock market. There are a lot of factors that affect it, but nobody can ever get their arms around what it's going to do."