Off the Charts

Off the Charts - March 2009

Lafayette Parish’s travel and tourism industry is driving the local economy, but it’s still missing a key ingredient for big business — a full-service 4- or 5-star hotel with a convention center facility.

Hospitality is one of the hallmarks of Lafayette and Acadiana, so it makes sense the industry is such a vital part of Lafayette’s economy. The industry encompasses more than just hotels and restaurants. On a broader level it includes everything from transportation to retail to arts and entertainment and recreation facilities. As a whole these pieces make up one of Louisiana’s largest economic drivers — the travel and tourism industry.

The economic impact of domestic travel — defined as U.S. residents traveling to places more than 50 miles from their homes or to places where they have an overnight stay in paid accommodations — has grown steadily in Lafayette Parish since 1998. Our hotels, restaurants, roadways and airport are consistently filled with business travelers, echoing the vitality of Lafayette’s overall economy. An expected dip in 2005 due to the hurricanes was only a temporary decline, as Lafayette Parish has rebounded with double-digit increases in 2006 and 2007. With several new hotels coming online in 2008 and the biennial show LAGCOE scheduled for 2009, travel-related numbers should continue to increase locally.

Even though travel expenditures in 2007 are up on a statewide level, they have not recovered to 2004 levels. However, in Lafayette Parish expenditures rebounded 27 percent to $337.5 million in 2006 surpassing 2004 numbers by 1 percent. Between 1998 and 2004, Lafayette Parish averaged a 4.2 percent annual increase in travel expenditures with the largest annual increase (8 percent) between 2003 and 2004. Lafayette Parish has seen only positive growth of travel expenditures since 1998, with the exception of 2005. Lafayette has more than made up the deficit resulting from the 2005 storms; 2007 saw an increase of nearly 12 percent over 2006, the highest “normal” single year increase, and its totals are 12.7 percent higher than 2004 totals. Travel expenditures include spending by travelers on goods and services during their trips, such as lodging, transportation, meals, entertainment and retail shopping.

In the last 10 years, travel-generated employment — jobs generated or supported by traveler spending — has remained fairly steady, with 2007 having the highest employment at 3,390 in the past decade. Travel-generated payroll is the wage and salary income paid to employees directly serving travelers. One dollar of travel spending generates different amounts of payroll income within the various travel industry sectors depending on the labor content and the wage structure of each sector. Hotel and food service managers, for example, have a higher wage and higher impact on total payroll than entry-level sales positions. In 2007, every $86,495 spent by domestic travelers in Louisiana directly supported one job. In Lafayette Parish, domestic travel has generated more than $40 million per year in payroll since 1998. In 2007, that number topped $60 million for the first time, an increase of 11 percent over 2006. Although domestic travel directly supports only 22 percent of all hospitality and leisure employees in the Lafayette MSA, the number of travel-generated employment has grown 15 percent, and average wages have increased 13 percent since 1998.

In contrast to travel-generated employment, industry employment represents those employed in all accommodation and food service subcategories — hotel, bed and breakfast, restaurants, bars. Lafayette is a service-oriented community with growing affluence. Not only do business and leisure travelers drive the hospitality industry in Lafayette, but Acadiana residents with discretionary income also give a boost to the industry by utilizing the same services and facilities as travelers. Lafayette Parish’s industry employment reflects our position as the Hub City. Since 2003, when the Louisiana Workforce Commission (formerly the Department of Labor) began to break out accommodation and foodservice as a subcategory, employment has grown 17 percent to just more than 15,000. This growth reflects not only increased workforce needs in existing establishments but also new workforce created by new establishments.

A drive around town will show that Lafayette has seen a boom in hotel developments. In 2008, there were 5,831 rooms with an average monthly occupancy rate of 65.5 percent. There are nearly 600 new rooms planned, increasing the existing market by 10 percent. Hotel receipts have increased by 77 percent in the past five years, and 2008 expenditures through November (the last month reported) are 15 percent higher than in 2007.

Recent developments demonstrate that hoteliers see an opportunity to not only grow their business but to expand the scope and quality of services available in Lafayette. New hotels are delivering a desired upgrade in services and amenities for leisure and business travelers, which help to enhance the overall atmosphere of Lafayette. However, to make Lafayette even more attractive to high-level travelers, as well as meeting and convention planners, we need to see the development of a four- or five-star, full-service hotel. Lafayette needs a first-class space for visiting executives. We need large meeting spaces with adjacent accommodations to attract specialized clientele, conventions and functions. We already offer top-notch food, entertainment and cultural activities. Let’s complete the package with first-rate accommodations for the affluent traveler.

Gregg Gothreaux is president and chief executive officer of the Lafayette Economic Development Authority.