In Montana, hospitality and tourism generates nearly 60,000 jobs and injects $3.7 billion into the economy. But how did the Montana hospitality industry weather 2020?
Major disruptions to leisure and business travel led to plummeting occupancy rates and decreased RevPAR (RevPAR is a common metric used to determine revenue per available room).
From January to November of 2020, Smith Travel reports noted that overall occupancy slipped to 52%. That’s down from an overall occupancy rate of 64% in 2019. But even with a 12% decrease, Montana fared better than much of the nation. CBRE most recently reported a 37.9% decline in occupant in the third quarter of 2020.
The pain in the market was not spread equally across geographies or hotel types.
Geographically, rural and small town hotels rebounded in the second half of the year ahead of urban hotels. Economy and midscale hotels had smaller drops in RevPAR while luxury hotels took the hardest hit.
Leisure travelers propelled most of 2020’s travel activity. When these travelers chose to go on vacation, they visited less densely populated places. Montana proved to be a popular destination, with record numbers of visits to state and national parks.
Even so, large numbers of tourists did not fully protect Montana’s hotel industry. Last year, the average daily rate for a room fell 14% in Montana. Across the US, the average daily rate plummeted 26%. In Montana, that worked out to an average daily rate of $94.
For places like Bozeman and Missoula, one of the largest drivers of hotel occupancy in the fall shoulder season are college football games – and even though those were cancelled, taking bookings with them, a lookback at the data shows those losses were mostly recovered.
Across Montana, hospitality construction and transactions carried on. While perhaps the Sleepy Inn in Missoula raised some eyebrows as a new acquisition, the Kalispell Grand Hotel also made news for changing hands.
Construction was busy in 2020 – around the state, new hotels popped up even as the pandemic waged on.
In Missoula, the AC Hotel downtown is nearing completion on a 105 room facility. Just across the street, The Wren hotel is taking shape as well (website marks a 2021 opening date). At the site of the former Ruby’s Inn on North Reserve, construction on Homewood Suites has begun.
Would it surprise you to learn that Big Sky is building a luxury ski-in, ski-out resort? The resort was already under construction when the pandemic began. However, an outbreak of over 100 cases of COVID-19 raised questions about shutting down construction in mid-summer. The $400M project is on schedule to open in 2021.
September 2020 brought the news of a convention center and hotel in Billings. Reportedly targeting “business travelers,” the site will eventually host a 22,500 square foot convention center and 100+ rooms.
A Great Falls hotel project initially launched in 2016 was finally completed in 2020, a delay chalked up to contractor issues. The MainStay Suites/Sleep Inn was originally planned to open in 2017. With a mix of extended stay and shorter stay suites, the hotel is near Great Falls International Airport.
Bozeman saw the completion of a Kimpton – Armory Hotel in a former National Guard building. With Peloton bikes on site and a rooftop restaurant, the hotel has their target market sharply in view. In addition to a few restaurant concepts, a music venue is planned for the site.
Confidence in Montana hospitality is steady, as evidenced by ongoing hotel construction across the state (to say nothing of new restaurants and entertainment venues also in the works). As air travel returns to an equilibrium, we’ll keep tracking hospitality trends across Montana.