Newport and Bristol county’s tourism industry benefited from record-high room rates and soaring occupancy over the last fiscal year, according to the tourism authority’s annual financial audit. However, Discover Newport is taking steps to ensure rising costs and growing summer visitation don’t impede the industry further down the line.
“We are a very competitive industry and there’s some concern about where the ceiling is and how much are people willing to pay to travel,” Discover Newport President and CEO Evan Smith said. “Travel inflation I think is very real and it concerns me because I do think at some point there’s going to be a correction in the marketplace.”
The Newport and Bristol County Convention and Visitors’ Bureau, also known as Discover Newport, submitted its annual financial audit for the fiscal year covering June 30, 2021, to June 30, 2022, to the municipalities it reports to earlier this month.
According to the audit, the tourism authority reaped $5.7 million in revenue over the past fiscal year, a 67% increase over the previous year. Discover Newport is mainly funded through hotel taxes, revenue from which increased by 85% during the same time period.
The large increase in revenue from hotel taxes can be largely attributed to increases in room rates and inflation, rather than increases in occupancy. The audit document shows the average daily room rate at $224.30, more than double what it was the previous fiscal year. Smith said he is worried the increasing room rates in Newport County might dampen interest in travel to the destination in the future.
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“We’re narrowing our client field so thin, that’s what concerns me,” Smith said. “We’re marketing to the 1% is the issue…I think it’s a testament to the destination that people are willing to pay a premium to come, that they value the experience they’re going to get and will pay that much more, but honestly, you can fly to London with the airfare and three nights hotel cheaper than you can spend a weekend in Newport.”
Occupancy did see a significant increase over the previous year, however, from 43.18% to 57.18%, which is the largest increase it has seen in the last five years, although it remains lower than the occupancy rates of fiscal year 2019 and 2018. The audit document notes summer months are close to reaching “maximum capacity,” which Smith said is another concern of the organization. Many Newport County hotels are sold out during the summer, especially during the weekends.
He said the tourism authority plans to advertise weekday and off-season visitation more to offset the popularity of the summer months.
“We don’t need to devote as much financial resources to promote the summer anymore,” Smith said. “We’ve done that for a long time and now we’re anticipating – I don’t want to call it a saturation point but when the house is full, the house is full.”
Smith also said he looks forward to meeting with the new members of Newport City Council to brief them on the city and broader county’s tourism industry. During its goal-setting session, Newport City Council discussed ways to increase the city’s revenues, one of which was to find ways to better access and utilize funds acquired through taxes on the tourism industry.
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“The tourism industry is already highly taxed and fee’d,” Smith said “This isn’t a criticism, but an observation, many, many newly elected officials just are not aware of the depths and generation of fees. Now having said that, I think it’s a very appropriate question to ask… as an organization we are there to dialogue with elected officials, to talk about it, explore it and make sure it remains competitive. I always welcome the opportunity to showcase the enormous revenue travel and tourism creates.”