York County Tourism Grant Committee Announces First-Ever Round of Awards

The York County Tourism Grant Committee announced Wednesday that it awarded more than $800,000 to 18 projects selected as the first-ever recipients of York County Tourism Grants.
After receiving more than 60 applications totaling more than $10 million in requests, the Committee chose recipients based upon a project’s ability to boost tourism in York County, while tapping into industry trends and maximizing economic impact through overnight stays, said Eric Menzer, Chair of the Grant Committee and President of the York Revolution.
“Today we’re funding an array of innovative projects that represent a broad range of ideas to grow tourism and enhance the visitor experience in York County,” Menzer said. “When we started this journey, we said we wanted projects that would make the greatest impact, and the Committee believes the first class of recipients has set a high bar for future awards.”
Grants will be awarded to the following organizations:
  • Military Vehicle Preservation Association: $32,000 to bring the International Convention of the Military Vehicle Preservation Association to York
  • Mason-Dixon Business Association: $2,500 for Discover Delta and the marketing of recreation, history, shops and restaurants
  • Red Lion High School Student Council: $10,000 to assist with the hosting of the 2017 PA Association of Student Councils State Conference in York
  • York County Rail Trail Authority: $100,000 to complete the Northern Extension of the Heritage Rail Trail*
  • YWCA York: $7,861 for the YWCA York’s Synchronized Swimming Meet
  • York Expo Center/York Fair: $66,000 for the York Agricultural Society Action Plan for the Future*
  • York Expo Center/York Fair: $55,350 to host the AAU Middle Atlantic Wrestling Association’s Eastern National Wrestling in 2019 and 2020*
  • York Expo Center/York Fair: $30,000 for Wi-Fi upgrades at the York Expo Center
  • We Build You Play Sports Group: $45,000 for the York Invitational volleyball competition
  • Borough of Spring Grove: $13,000 to create the Smoke in the Grove BBQ Competition
  • Bailey Leasing, Inc.: $5,250 for a York County Promotional Motorcoach
  • Steam Into History: $40,000 for an additional coach to expand operations
  • YMCA of York and York County: $40,000 for improvements to the Graham Aquatic Center for competitive swim events
  • City of York: $225,000 for Memorial Park softball field improvements*
  • Main Street Hanover: $50,000 for Downtown Tourism Development Program
  • Hanover Area Historical Society: $5,000 to market the Carriage House Museum
  • Susquehanna Heritage: $50,000 for Susquehanna Riverlands – Zimmerman Center hour expansion and destination marketing
  • York County History Center: $50,000 for Tourism Asset Development for the new York County History Center
*Indicates multi-year grant
In addition to the $826,961 that will be distributed to these 18 projects, the committee has also reserved $100,000 for a York County branding initiative between the York County Community Foundation and Downtown Inc.
“The grant program has always stressed the importance of collaboration. Upon receiving multiple applications seeking funding for a York County branding initiative, we decided to schedule a meeting with the various organizations to work toward that goal in a cohesive way,” Menzer said.
“I also have to say that this was incredibly difficult,” Menzer added. “It’s very clear that there was huge pent-up demand for this program. I assume some of the applicants will hone their ideas and apply again in the next round or next year. Fortunately, with a predictable funding source we will be able to have this kind of impact every year for the foreseeable future.”
Wednesday’s grant awards are the culmination of years of lobbying that resulted in a 2016 state law allowing York County and more than 50 other counties to further invest in local tourism through their hotel room tax rate.
York County Commissioners were the first in the state to take advantage of the new law when they raised the local hotel room tax rate from 3 percent to 5 percent last spring. The new rate went into effect in July, with 33 percent of all room tax revenue now dedicated to the grant program. 
After receiving applications in February, the Grant Committee spent more than two months reviewing them before reaching a decision. The York County Convention & Visitors Board of Directors ratified the Committee’s selections May 4.
“The Board thanks the Grant Committee for its diligence and dedication to funding projects that will draw more people to York County and enhance their experience while they’re here,” said Liz Winand, Chair of the YCCVB Board of Directors. “This is a wise investment of the York County hotel room tax and a sign that our already flourishing tourism industry has even greater days ahead.”
The York County Tourism Grant Program will open for a second round of smaller awards starting July 10. The maximum grant request will be $10,000. Approximately $60,000 is available.
As was the case for the first round, all grant applicants must provide a 25 percent cash or in-kind match. The Grant Committee will announce Round 2 recipients by October 12.
The timetable for the next round of large grants will be similar to this year, with an application period opening in early 2018 and awards by June.
Questions about the application process may be directed to the York County CVB.
In addition to Menzer, the York County Tourism Grant Committee is comprised of State Representative Kate Klunk, York County Commissioner Susan Byrnes, York County Economic Alliance President and CEO Kevin Schreiber, RKL Partner and YCCVB Board Member Rob Berkebile, Springwood Hospitality CEO Dave Hogg and Hanover Area Chamber of Commerce Marketing and Public Relations Director Katy King.
The York County Convention & Visitors Bureau’s Mission is to maximize tourism expenditures and their economic impact in York County, PA, through comprehensive tourism sales and marketing programs. The York County CVB’s Vision is for a York County where tourism is recognized for the value of its economic impact and its role in raising the profile of York County as a sought-after destination. For more information on the York County Convention & Visitors Bureau, call 1-888-858-9675 or visit www.yorkpa.org.

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Millennials Drive Record U.S. Hotel Occupancy

U.S. hotel occupancy in the first quarter of 2017 was the highest ever on record at 61.1% according to STR Global, the industry’s data-keeper. This prompted Mark Woodworth, senior managing director and head of lodging research at CBRE Hotels, to say, “On the surface, it seems that a quarter of weak GDP growth does not mean that much.”

Millennials value experiences in the same way that their parents valued things. This shift is fueling a noticeable increase in experiential leisure travel. I am personally convinced that the strong performance of the U.S. hotel industry, despite the meteoric rise of AirBNB and other non-traditional competitors, is due to this significant cultural shift among millennials. They now comprise the largest guest demographic for both Hilton and Marriott products.

I don’t know what this means for the future – no one does – but I wanted our readers to be aware that the hotel industry as a whole is doing quite well, even in a quarter with less than 1% GDP growth.

by Dave Hogg               May 3, 2017

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Good Times Roll for Some Hotels


This headline may be confusing, depending on what you read and how you process the information. Nationally, the hotel market is softening from its multi-year charge that has caused it to surpass its record 2007 RevPAR levels. That’s not soft in my book. But the growth rate is declining, and that’s called “softening” in Wall Street terms.

Some individual markets have become saturated with new product, and the revenue of every hotel in those markets is affected. I see this coming soon in certain areas where we have been looking, and we’re running away from those markets. No doubt those locales will temporarily see be a decline in RevPAR as three, five, or even more new hotels open within 18 months of one another.

RevPAR has declined in energy-sector-dependent locales such as Austin, TX (dramatic) and Pittsburgh, PA (not as dramatic). This is why Springwood has always sought locations in high barrier-to-entry markets with diverse economies. We’ve never chased the fracking boom even though it would have been an easy play given our Pennsylvania location. Now, we and our investors are glad that Springwood had restraint. Those markets will eventually rebound, but we don’t enjoy roller coasters of that sort.

So, what about the headline of this article? Simply stated, Springwood’s focused approach to hotel development works. As of today, we have seven hotels open (two of them have been open less than a year). In our offerings we tell prospective investors that we anticipate distributing cash TWICE a year: within a month after the end of the second and third quarters of every year. Hotels are a seasonal business, and those are times of year when we can readily predict that we’ll have cash to distribute.

This year, six of our seven hotels are distributing cash to investors at the end of the first quarter, as well. The skinniest of these distributions is $50,000; several are many times that figure. That’s when you know it’s been a good winter!

We never promise these “spring” distributions, but we’re delighted when we can do it. This is the first time in our history that so many of our properties have been able to make a spring distribution. Let the good times roll.

by David Hogg April 26, 2017

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Extended-Stay Hotel Performance Varies Widely by Location

This is a follow-up to my last two posts about how schizophrenic local U.S. hotel markets are right now.  Some are booming, and others are not.

Highland Group performs nearly all of our feasibility studies.  They are the authority on the Extended Stay segment of the U.S. hotel industry.  The following summary of their most recent quarterly study of the industry confirms that “the industry” is either great, poor or somewhere in between, depending on the local market:

“The Highland Group’s much anticipated annual report on the US extended-stay hotel industry for 2017 is now hot off the press. This year two reports and a subscription option are available. The US Extended-Stay Lodging Market report covers the US and the 100 Largest Markets report features the nation’s 100 largest Metropolitan Statistical Areas (MSAs). Major results for extended-stay hotels include:

  • Room nights available up 6.2% compared to 2015
  • Room night demand up 5.4% over the last year
  • Rooms under construction at record high
  • Average rate up 4.2% compared to 2015
  • RevPar up 3.5% over last year
  • Double-digit RevPar growth in 13 MSAs
  • RevPar declines in 24 MSAs
  • Double-digit supply growth forecast in more than one third of MSAs in 2017
  • No supply growth expected in more than 30 MSAs in 2017″

What’s not obvious in this summary is that it only include the nation’s top 100 markets.  That includes ONLY larger markets, such as Harrisburg, PA and Frederick, MD for instance; but it ignores the markets, such as York and Lancaster, PA where most of OUR hotels are located.  The advent of Hilton’s robust Home2 Suites brand is disrupting the extended-stay segment in these smaller markets that are not included in the Highland study.

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Fake news? Or only part of the story?

Yesterday a concerned investor sent me an article with the following headline: “Hotel Overbuilding Softens New York, Hurts Austin, Crushes Oklahoma.”  Sounds ominous. The tag line went on to say, “New construction is hurting the hotel business in markets across the country.”

The article quoted industry expert Jan Freitag, senior vice president for STR Global: “There are a ton of markets where occupancy rates have already declined.”  Let’s break it down.  For hotels, the supply/demand equation is always local.  Freitag could have said, “There are a ton of markets where occupancy rates are reaching new record highs in 2017,” but that’s not as interesting.

What’s lost in the spin is Freitag’s assertion of “Record-breaking occupancy rates from last year (2016),” in the same article.  Freitag described 2016 U.S. hotel occupancy this way in another recent article posted HERE:  “It’s the highest occupancy rate ever recorded for a year.”  Wow, that’s really good!  Why is this great news lost?

That sentence in the scary article finishes with, “will slightly decline in 2017 and 2018.”  The story becomes the projected decline instead of the record performance.  The second article provided more detail, with Freitag saying that “occupancy rates are expected to dip slightly in 2017 and 2018, while demand will help keep room rates rising at a healthy rate.”  Yes, friends, hotel demand is measured by RevPAR (revenue per available room), a measurement that accounts for both occupancy and ADR (average daily rate).

We find the whole story in the article I posted HERE:  “Revenue per available room is expected to rise 2.3 percent in 2017, according to STR. Room rates should also rise 2.8 percent on average.”  STR has also forecast rising RevPAR in 2018, as a matter of fact.

The Rest of the Story…

Hotel supply/demand is a localized phenomenon.  Be wary of hand-picked local scenarios.  Some local markets will enjoy healthy economies yet have only modest growth in room supply, while others will endure a poor local economy coupled with aggressive room supply growth.   Words like “hurts” and “crushes” only apply (as far as I’ve read and heard) to oil/fracking markets, which Springwood has carefully avoided.  I chased sites in Pittsburgh a couple years ago until I realized that their newfound growth was fracking-driven.  Then I ran away.  That growth evaporated after several new hotels were built.

York and Lancaster, PA are seeing a little occupancy erosion – some of it from our own new products – but  both markets opened two hotels last year and two more are opening this year (including our TRU by Hilton).  Occupancy has softened but the new rooms are being absorbed at about the rate that our market studies had forecast.  That’s the key.

We’re setting record revenues right now in Hershey, PA and Frederick, MD. One new hotel is on the way in each of those markets, so the gains will moderate, but it’s still record revenue.  I could write an article about those two markets headlined, “New Hotel Construction Crushes Growth Rate of Record-Setting Revenues,” but who would read it?


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TRU by Hilton Brand Explodes onto the Scene

309AAFF900000578-3415256-image-a-68_1453839027296See this article in today’s Hotel News Now online:  TRU by Hilton

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Hotel Occupancy Stable, Room Rates Rising Despite New Construction

The headline says it all.  Below is a January 30, 2017 article by Brendix Anderson, reprinted from National Real Estate Investor magazine (I added the bolds).


Springwood’s TRU by Hilton Lancaster, PA

Hotels had another great year in 2016, even though developers keep on opening new properties. For the whole year of 2016, the occupancy rate for hotels averaged 65.5 percent in the U.S., according to hotel data firm STR.

“It’s the highest occupancy rate ever recorded for a year,” says Jan Freitag, senior vice president of lodging insights for STR.

Occupancy rates have kept rising even though hotels face competition both from home-sharing websites like Airbnb and from hotel construction. However, occupancy rates are expected to dip slightly in 2017 and 2018, while demand will help keep room rates rising at a healthy rate.

There are now 183,000 hotel rooms under construction in the U.S., according to STR. That’s up 30 percent from 2015. This year, the inventory of hotel rooms is expected to grow by 2.0 percent. Demand for those hotel rose is expected to be high, but not high enough to keep the occupancy rate from falling on average by 0.5 percent in 2017.

Nevertheless, revenue per available room is expected to rise 2.3 percent in 2017, according to STR. Room rates should also rise 2.8 percent on average.

The danger of overbuilding would be higher if banks were more willing to make construction loans. Some large hotel projects in downtown areas have been delayed because banks are not willing to lend as much.

“The level of new construction is not as high as it would normally be given the occupancy numbers,” says Jeff Myers, managing consultant for CoStar Portfolio Strategy. “The financing is not there.”

“There has truly been a shift in new construction—in what is being built and where it is being built,” says Myers. More than a third of all the new hotel rooms that have opened since the recovery began in 2010 have opened in central business districts (CBDs). Before 2010, the share of all new hotels that opened in downtown areas was closer to one in six, according to CoStar.

“If there is a supply risk, the risk is going to be most pronounced downtown or in downtown submarkets,” says Myers.

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