The data provided to me by Chuck Carey on Hotel Rooms Tax Revenue provides all sorts of analysis possibilities. The following provides some information specific to the Town of Dennis.
Between 2000 and 2007 the Town of Dennis Rooms tax revenue dropped from $1,178,239 to $903,321. Through the first ten months of 2008 rooms taxes have totaled $833,209, this is behind last years ten month total of $892,828, a 7.2% drop in revenue.
As I illustrated on the previous post, the Dennis rooms tax revenue changes did not bear any resemblance to the changes taking place on Cape Cod, or in our neighbor Yarmouth. A big part of the changes in Dennis is due to the on-going erosion of the hotel base. Since 2000, 230 hotel rooms have been removed for varying periods for time from the hotel stock. Some of these lost were conversions to year-round housing (66 hotel rooms impacted), while the majority were converted to time shares (164 hotel rooms impacted. The end result has been a combination of hotel rooms being completely removed from the stock or hotel rooms being removed from the hotel supply during the most lucrative time periods. Either way, the end result has been a loss of Hotel Rooms Tax Revenue.
The data for 2006 is an aberration, it may reflect changes in room prices for remaining supply, it could represent fewer time share units being utilized as time shares thus paying rooms tax, and it could represent some of the rooms removed for remodeling and sale as time shares returning to the market thereby, temporarily increasing the rooms supply in the town. In that year both Yarmouth and the Cape as a whole saw reductions in rooms tax revenue, while Dennis bucked the trend that year, it is clearly not the normal path for hotel rooms tax revenue in the town.
The outlook for the coming year is not too good. Anticipated domestic travel in the United States is expected to be down. In October of 2008 reports projected a decrease in domestic leisure travel for 2009 to be about a 1.5% drop. In early 2009, these same travel industry forecasts are suggesting a drop in leisure travel of about 3.5%. Another aspect of this decrease in travel has been projections that those who do travel, may reduce their vacation expenses (meals, recreational activity and automobile oriented expenses) by as much as 15%. This will work as a double whammy for the local economy, as there will be fewer people here spending less than they have in the past in the local economy. In a future post, I will try to look at what this decrease in secondary spending could mean in overall travel related expenditures in the town.