R.I. Hospitality Association hosts 13th annual Economic Outlook breakfast

HUDSON RIEHLE, the National Restaurant Association’s senior vice president of research and knowledge group, speaks at the 13th annual Economic Outlook breakfast on Thursday  hosted by the R.I. Hospitality Association at the Convention Center downtown. / PBN PHOTO/EMILY GOWDEY-BACKUS
HUDSON RIEHLE, the National Restaurant Association’s senior vice president of research and knowledge group, speaks at the 13th annual Economic Outlook breakfast on Thursday hosted by the R.I. Hospitality Association at the Convention Center downtown. / PBN PHOTO/EMILY GOWDEY-BACKUS

(Updated 1:53 p.m.)
PROVIDENCE – The R.I. Hospitality Association hosted the 13th annual Economic Outlook breakfast on Thursday at the R.I. Convention Center, reporting “moderate growth” in the hospitality industry nationally and positive growth in the Rhode Island market.

“Moderate growth” in the lodging end of the industry was reported by Rachel Roginsky, principal of the Pinnacle Advisory Group.

Nationally, 2015 marked the highest occupancy at 65.6 percent, and average daily rate at $120, ever measured, she said.

However, according to her research, hotels across the country have seen a negative impact in occupancy and ADR as competition with sites like Airbnb, which Roginsky said booked 500,000 stays in 2015, increases.

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The positive growth was also reflected in the Rhode Island market as, according to Roginsky, occupancy, ADR and revenue per available room, RevPAR, “finally surpassed the peak seen in 2007.”

In 2015, there was a 67.6 percent occupancy rate at Rhode Island hotels while the ADR was $135 and the RevPAR was measured at $91.40.

This represents a 4.1 percentage point increase in statewide occupancy year-to-date from 2014 to 2015 as well as a 5.3 percent increase in ADR and an 11.2 percent increase in RevPAR in the same time frame, according to statistics from Smith Travel Research cited by Roginsky.

Compared with New England, Rhode Island came in second for occupancy rate, behind Massachusetts’ 70.3 percent; third for ADR, below Massachusetts’ $174.26 and Vermont’s $138.58; and second for RevPAR behind Massachusetts’ $122.65.

Roginsky projects the “moderate growth” has continued into 2016, projecting a 66.1 percent occupancy rate across the state, an ADR of $138.27 and a RevPAR increase of 4.4 percent to $91.45 for the year.

Hudson Riehle, National Restaurant Association’s senior vice president of research and knowledge group, reported “moderate growth” so far in 2016 for restaurant business nationally.

One of the factors he claimed for the slowed pace is the changing nature of the restaurant dining experience. Increasingly, he said, this is due to millennials’ preference for “off-premise” dining options – like take-away, curbside pick-up, meal-in-a-box plans and delivery service.

Riehle said the U.S. consumer is spending 47 percent of every food dollar in the restaurant industry, compared with 25 percent that consumers spent in 1955.

However, according to the National Restaurant Association, there has been a 14 percentage point increase, from October 2007 to May 2016, in adults who say they are not eating at restaurants as often as they would like.

The first six months of 2016 saw below-expectation economic activity, the weakest since 2011, he said. Evidence for this can be seen in consumer’s reaction to the upcoming presidential election. National Restaurant Association research found almost one in three U.S. adults, 31 percent, admit they have become less confident about their personal spending in light of the political climate.

“There has been an atmosphere of uncertainty that continues to affect the consumer mindset,” said Riehle.

Yet, he suggested, this “moderate growth” will continue through the end of the year and into the future.

Riehle’s prediction is based on the lower gas prices, which, he said, “translate into higher restaurant sales” and the 11-month high in consumer confidence measured by the National Restaurant Association in August. This metric is linked with employment, said Riehle, and confidence is up most among millennials, but regionally, New England does not rank in the top 50 percent.

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