2007 Industry Report: Travel & Tourism

Coming attractions boost industry's going concerns
By Arthur O. Murray

Tour Guide

TREND: The weak dollar, which has kept tourists from traveling overseas, is helping some resorts.

OUTLOOK: Expect hotel occupancy and room rates to increase slightly in 2007.

Good weather meant good times for Tar Heel tourist attractions last year. From the coast to the mountains, a winter that was cold but not too cold, a summer that was hot but not too hot and a hurricane season that brought little wind or rain allowed crowds to flock to beaches, golf courses and other spots.

Carolyn McCormick, executive director of the Outer Banks Visitors Bureau, says occupancy-tax revenue through October was $36.1 million - up about 9% from 2005, which also was a strong year. Innkeepers were helped by a weak dollar that kept many vacationers from going overseas. "We're not inexpensive," McCormick says. "Some oceanfront rentals in summer are going for $10,000 a week. That attracts the same person that's going to look at a trip to Paris or check out the Great Wall of China." Demand for lodging should remain high this year. "One company says it is 73% up in advance bookings." Rates, however, are stable so far.

Carol Lohr, executive director of the Crystal Coast Tourism Development Authority in Carteret County, says occupancy-tax collections were up about 14% through October. One reason was the reopening last May of the North Carolina Aquarium at Pine Knoll Shores. It had been closed nearly three years for a $25 million renovation, which expanded it from 29,000 to 93,000 square feet. Lohr says 2007 will be another good year. The authority is promoting Morehead City's 150th anniversary in May. She thinks it will attract adults nostalgic about childhood summers at the beach.

Pinehurst hopes to lure more visitors by offering more tee times on its most popular course, says Tom Pashley, executive vice president of sales and marketing. Pinehurst No. 2 was closed five weeks in 2005 because of the U.S. Open golf tournament. Last year, it started allowing players to begin rounds on the 10th hole rather than starting everyone on the first. "It allowed us to get more people on the course at the times they wanted to play." The number of rounds played at Pinehurst's eight courses was up 10% from 2005.

The resort did well in 2006, particularly with groups and business travelers, Pashley says, though he declined to provide revenue. He expects another good year. The second phase of an $8 million renovation of The Carolina hotel is scheduled to be finished in mid-March. He also expects the resort to benefit from the U.S. Women's Open in late June at Pine Needles Lodge & Golf Club in nearby Southern Pines and from the 2007 Jimmy V Celebrity Golf Classic, which is moving in August to Pinehurst from Prestonwood Golf Club in Cary.

In Asheboro, the North Carolina Zoo's projected attendance was more than 700,000, up 8% from 2005. Many came to see a special Australian exhibit, spokesman Rod Hackney says, adding that attendance should increase again this year. The zoo is bringing back Tort and Retort, two Galapagos tortoises that were the zoo's first animals when it opened in 1973. They've been at an alligator farm in St. Augustine, Fla., since 1983.

Business was brisk in the mountains. In Asheville, Biltmore Estate had its best year, according to Julie Morris, director of marketing. Ticket sales through early December were up 15% from 2005 to more than 930,000. She attributed the increase to new discounts for off-season months such as January and February. Morris also expects a boost from extending the Festival of Flowers, held in April, to May 20.

Sugar Mountain ski resort had one of its best years, says Kim Jochl, marketing and events director. "It was cold, which made for good snow-making weather, even though it didn't snow much." Revenue through November was up 12%.

Statewide, occupancy at Tar Heel hotels and motels was up 3.4% through October compared with the same period in 2005. "North Carolina has been one of the few states to see growth in demand," says Jim Hobbs, executive director of the Raleigh-based Lodging Association of North Carolina. Business travel fueled much of the increase. "That's obvious in Mecklenburg and Wake counties. When you have strong demand increases in those markets, it's attributed to the business travelers."

As for 2007, "the industry is in for another very good year. It won't be the strong growth we've seen in 2005 and 2006." He expects occupancy to grow 2%, while rates could increase 4%. "No one is projecting a down year in demand and rates."