West Michigan tourism officials are reporting upward trends in travel and hotel stays as COVID-19 restrictions lift, and leaders are optimistic about the local tourism economy for the rest of the summer.
Hotel occupancy hit a national historic low of 24.5 percent in April 2020 as the pandemic began to take hold, according to the American Hotel and Lodging Association. Kent County’s average occupancy rate hit a low of 18 percent during that time.
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So far this year, Kent County has seen month-to-month gains in hotel stays, said Experience Grand Rapids President and CEO Doug Small. March 2021 ended with an average occupancy rate across Kent county of 40 percent, almost 10 points higher than the previous month, Small said.
“Our leisure travel is not what it’s been in the past, but it’s picking up,” Small said. “Amateur sports are picking up as well. We just don’t have business travel back.”
Business travel needed
Meanwhile, developers are unlikely to plan new hotel construction in Grand Rapids until a 60 percent occupancy rate is consistently hit like it was before the pandemic, Small added. Convention activity and business travel will be a driving force behind boosting occupancy rates.
“If we can get some of our group travel back, we’re going to be fine,” Small said. “It’s not going to be where our hotels want to be — and I’m with them — but if we can get some of our group travel back and are at least at 50 percent (occupancy rate) this year, we’ll be OK.”
However, it remains unclear when business travel will return to pre-pandemic levels. An American Hotel and Lodging Association forecast suggests that business travel will increase slowly while travel as a whole won’t reach 2019 levels until 2024.
Despite the lack of business travel in Grand Rapids, 2021 has brought some high points. On May 1, Kent County had an average hotel occupancy rate of 82 percent, which was likely because of Grand Valley State University’s graduation and amateur sports tournaments that fell on the same weekend, Small said.
‘Confidence will build’
Muskegon County also relies heavily on business travel, and is seeing similar occupancy levels as Grand Rapids. Average hotel occupancy levels dipped to 22.5 percent in April 2020 but rebounded to 45 percent in the same period this year, said Bob Lukens, Muskegon County’s community development director.
“By July 1, all the restrictions will go away and I think we’ll see a huge resurgence this summer in travel,” Lukens said. “We’re expecting the trend to keep rising. We do have a number of events that are happening this year. Some did cancel earlier this year, but many will be happening. Summer is always a very strong time for the lakeshore communities. We anticipate a pretty substantial rise in occupancy.”
Lukens also reported “a lot of interest” in Muskegon’s new convention center downtown as some events are being booked at the new venue for 2021 for smaller meetings and events.
“As we progress through the summer, confidence will build,” Lukens said.
Leisure travel returns
Kalamazoo County has also seen month-to-month increases in hotel occupancy rates so far this year, said Dana Wagner, director of marketing and communications for Discover Kalamazoo. The March average hotel occupancy rate was at about 50 percent, which was 10 percent lower than 2019 numbers, but 20 percent higher than the beginning of the year, Wagner said.
“We’re seeing primarily leisure travel, and we expected that would be driving hotel stays, but we’re seeing some return to business travel for essential needs,” Wagner said. “Warmer weather helps for sure, and also the creativity of our businesses with doing outdoor live music, having our social district open downtown where people can walk downtown with their beverages, and ways we’ve made it easier for people to still do things.”
Wagner is seeing a higher interest in outdoor recreation in Kalamazoo and people wanting “smaller boutique experiences.”
April hotel occupancies in Holland, which are powered by leisure travel, are mostly on par this year with 2019 numbers at 57 percent, said Linda Hart, executive director of the Holland Convention and Visitors Bureau.
“We’re definitely on target, and we think we’ll do better than expected for May” 2021, Hart said.
Holland’s average hotel occupancy rate in May 2019 was at 71 percent. The city held a pared down version of its annual Tulip Time festival this year, which still attracted visitors despite the pandemic, Hart said.
“Corporate travel is still lagging, but for us that is primarily due to not having people back in the office,” Hart said. “Since return-to-work has been lifted, I think we’ll start to see some travel and meetings.”
Looking further into the summer, Hart expects average occupancy rates to fall somewhere between mid-pandemic and pre-pandemic levels, or between 60 to 80 percent.
“I’m not sure we’ll quite get to 2019 numbers, but mainly that’s because there is some travel hesitancy and we have a labor shortage,” Hart said. “That puts some added stress on restaurants and lodging because they can’t get the staff they need.”