BILLINGS — As the season for major travel winds down, Billings hoteliers said on Wednesday rates to rent a room in 2021 have increased about 30 to 40 percent after the COVID-19 pandemic forced a downturn in travel in 2020.
“We’ve seen our average rates go up in an area we’ve never been in before. And we’ve seen our occupancy skyrocketing this past summer compared to even the 2019, 2018 years, because people are out traveling more after being cooped up in their homes during the pandemic," said Ron Spence, Billings Hotel and Convention Center general manager on Wednesday.
Yellowstone County's share of the state 4 percent tax on the price of lodging reflects the increase of travelers to the Billings area.
Yellowstone County saw a 154 percent increase in lodging tax revenue from 2020 to 2021, according to the Montana Department of Commerce data.
Steve Warlich owns Best Western Plus Clock Tower Inn in downtown Billings. He said staff have seen their fair share of tourists during the summer, with many traveling from across the country to stay at the hotel.
“We’ve been very blessed in that way. Looking out the next three or four or five months, it’s going to be a lot different, we think. It will go back to very similar to what it was a year ago. We think we’ll do a little bit better in occupancy, better in what we call average daily rate," Wahrlich said.
While the state's lodging revenue figures seem to be pointing in the right direction for Billings, a wider look at tourism in eastern Montana shows a more stagnant picture, Wahrlich said.
“When you look at the year-to-date numbers and you compare that back to 2014, 2015 for Billings, southeast Montana, Glendive, basically the eastern part of the state. We’re exactly flat with those revenues. Rates have gone up. More hotels have come into the marketplace not only in Billings, but throughout eastern Montana. So in reality, while it’s nice to see the increase. Trust me, we are all happy. However the fact is we’re still flat with '14 and '15, meaning we have less people coming to the eastern part of the state," Wahrlich said.
Click here to view specific regional information from the Commerce Department website.
The rate at which the price of a room rebounded to pre-pandemic prices was faster than many in the industry expected, Wahrlich said.
“Rates have come back much faster than anybody anticipated. That includes me, that includes the people at Mariot, Hilton, the big boys. All of us missed that the rates would come back. Typically in a recession, hoteliers will drop rates and they take four to five years to get back to normal after a recession," Wahrlich said.
Both hoteliers said by far, Bozeman was the most expensive place in the state to get a hotel room over the summer and likely will be into the future.
"You can go to Bozeman and on a given night pay $500 a night for an average hotel room. Here in Billings, where the rates were running $70, $80, $90, now you’re seeing those rates around $130, $140," Spence said.
Spence said the highest he'd heard a room go for in Bozeman over the summer was near $1,000 per night.
At Billings Hotel, Spence said he estimated about 60 percent of the hotel's guests were from out-of-state. He said many people were just getting in the car to drive this summer, picking hotels as they went.
"They are coming out here because they are trying to get away from the bigger city. They are not going to the big amusement parks and big population centers. We’re seeing these people out here in our neck of the woods," Spence said.
Another downside of the pandemic was that conventions and business travel took a nosedive. If all goes to plan in the coming months and next year, Spence said the Billings Hotel will have a packed calendar of conventions.
“Right now, we’re seeing a lot of groups coming back. Our October, November, December, January are extremely strong. They are back again into 2019, 2018 numbers," Spence said.
While the Billings Hotel has 231 rooms, the Clock Tower Inn has 125 rooms and caters more to families and small groups. Wahrlich said the hotel industry at large hasn't been seeing nearly as many business travelers.
"It used to be predominately 60 percent business travel, 40 percent leisure. That has changed. Now it’s actually 70 percent leisure, 30 percent business. So it’s made a huge, huge change. International travel probably won’t be back for another two years. Overall, we learn to adapt," Wahrlich said.
After all, COVID-19 is still sweeping the state and nation and everyone has been thrown their share of curveballs during the pandemic. It's still anyone's guess as to what happens in the hotel industry in the future.
“We see it kind of flat next year. We’re anticipating people get accustomed to this. We see people going back to more urban markets and traveling there. And will the borders open to international travel? That will be an interesting item to see. And nobody knows. We have no clue. If I did, I'd be in Vegas," Wahrlich said.
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