|By Brandon Gee,, The Tennessean,
NashvilleMcClatchy-Tribune Regional News
May 02, 2011--Mother Nature took a big swing at Nashville's second-largest industry last year, but it wasn't a knockout blow.
Far from it.
In fact, in the first quarter of 2011, key hospitality metrics such as occupancy and average daily room rates are on the rise here compared with a year ago. Revenue per available room -- or RevPAR, the product of occupancy and average daily rates paid by guests -- rose 7 percent compared with the same period a year ago, according to Hendersonville-based Smith Travel Research Inc.
The metro area's hotel revenue was $156.9 million in the first quarter, a6.9 percent increase.
A deeper look at Smith Travel's numbers, however, reveals that the flood did have an impact. While the industry has improved locally, it has trailed the even larger post-recession gains of the broader U.S. hotel industry, which saw RevPAR increase 9 percent in the first quarter.
That gap when compared with the nation as a whole is mostly due to a post-flood drop in average daily rate for rooms in the Nashville area. In the flood's wake, the average daily rate fell between3 percent and 9 percent for seven straight months.
"The most significant cause, of course, was the closing of the Gaylord Opryland Hotel with its 2,881 rooms," said Duane Vinson, STR's vice president of client services. "Most other closures due to the flooding were short term."
The Nashville area's average daily rate increased 1.9 percent to $89.45 in the first quarter of 2011. That was not as brisk as the3.1 percent increase registered in average daily rate nationwide.
Post-flood losses were largely limited to the area near the Opryland Hotel and Nashville International Airport. After two months of gains, RevPAR in those locales fell for eight straight months after the flood.
A few other areas capitalized. In May 2010, RevPAR jumped 14.9 percentin Murfreesboro, 27 percent in Brentwood and Franklin, 14.2 percent in downtown Nashville, 32.9 percent along the Interstate 65 corridor north of Nashville, and 45.9 percent in all other parts of the metro area.
'Back to normal'
Ray Dayal is CEO and chairman of Pinnacle Hospitality Partners, which saw its Holiday Inn Express on Music Valley Drive near Opryland swamped in the flooding. Impressively, it was able to reopen only one month later. "The overall perception of the general public has changed since Nov. 15when Opryland opened back up," Dayal said. "Everything is back to normal, and I think we are stronger for it."
Since it accounts for one-fifth of Nashville's hotel tax collections, Opryland's closure created significant worries for a city that had just started building a $585 million convention center to be partly paid for by hotel tax collections.
But hotel tax collections fell just 10 percent in the six months that Opryland remained shut.
Butch Spyridon, president of the Nashville Convention & Visitors Bureau, said the city was able to save 81,000 room nightsout of 250,000 to 300,000 that were booked at Opryland (many of those conventions), saving about$21 million in visitors' spending.
"The uncertainty of how bad the damage was, and how long the recovery (would take) caused some to cut and run," Spyridon said. "We feel real good about minimizing the potential loss."
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Copyright (c) 2011, The Tennessean, Nashville
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