Aug. 14—It’s almost impossible to travel in downtown Savannah without sitting in traffic behind a carriage or trolley packed with tourists. In 2014, 7.6 million people stayed overnight in Savannah, filling up the nearly 15,000 hotel rooms the city has to offer.
And business will continue to grow into 2016, according to Mark Woodworth, president of Atlanta-based PKF Hospitality Research, who spoke to hotel professionals Thursday at the Embassy Suites in Downtown for the Georgia Hotel and Lodging Association’s annual Savannah forecast.
“The overall health of the lodging market here is extraordinarily good. We’re seeing new supply come in to the market and developers planning more and more projects, which shows that they’re recognizing just how strong the fundamentals are here in Savannah,” Woodworth said.
“We’re not concerned about there being too many rooms too soon here in Savannah.”
Occupancy rates for all hotels in Savannah should end the year at 72.2 percent, up from 69.8 percent last year, Woodworth said, adding that modest growth is also expected in 2016 at 72.9 percent occupancy.
Woodworth said that despite the growth of the shareconomy and such websites as Airbnb, which allows homeowners to rent out spare bedrooms to travelers, the Savannah market has experienced positive performance levels.
Another concern to those in attendance is the new $5 per night state hotel-motel fee, which took effect July 1. Woodworth said hotels with lower rates continue to get hit the hardest when it comes to absorbing the increased cost. Because that consumers often react negatively to increased costs and demand decreases, Woodworth said the estimated lost room revenue for all hotels in Savannah is just more than $17 million and $130 million statewide.
But so far locally, Savannah hasn’t had a lot of negative feedback from the fee, according to Joe Marinielli, president of Visit Savannah. So far only one convention group expressed concern when setting up its stay, but it didn’t prevent the group from booking the 2018 event, he said.
The full effect of the new tax remains to be seen, but state Rep. Ron Stephens, R-Savannah, announced Thursday that he is currently working on a bill that would propose cutting the fee to $2 per night.
“The proposed bill would also help spread the burden of the tax across more people so that hotels alone aren’t singled out, said Jim Sprouse, executive director of GHLA.
“Because of the way (the shareconomy) operates right now through the internet they aren’t paying taxes and they aren’t subject to the same regulations as the rest of the industry.”