Newport's tourism industry had a record-setting year. How it happened.
Newport County saw record highs when it came to hotel tax revenue throughout the last fiscal year, but tourism experts are expecting the leisure market to slow next year.
Discover Newport, the tourism bureau for Rhode Island hospitality heavyweight Newport County as well as Bristol County, approved the audit covering the organization’s fiscal 2023, which ended in June. The organization is a quasi-governmental nonprofit established by state law to drive tourism to the nine municipalities under its jurisdiction. It is funded through state hotel taxes, tourism fees and government grants and funding as well as private revenue sources ranging from advertising to event hosting to investment returns.
The revenue Discover Newport collected from the state hotel tax, the bulk of the revenue the organization receives, hit $5 million in FY23, a record high for the organization. While this was just a 2% increase from the previous year’s collections for Discover Newport, Newport and Bristol County hotels generated 22% more in total state hotel tax revenue by June 2023 compared to the previous fiscal year.
How well did Newport’s tourism industry do this year?
In FY19, just prior to the onset of the COVID-19 pandemic, Discover Newport collected $3.5 million from hotel bed taxes, but this number would soon plummet by 9% in FY20 and a further 17% in FY21. The FY22 audit acknowledged the tourism industry was beginning to recover, and the organization saw hotel tax revenues jump by 85%, despite two hotels being devastated by fires and one closing for renovations.
How did this boom happen? The audit identifies several reasons, mainly increases in both occupancy and average daily room rate. Although the number of hotel rooms available in the destination remained the same for FY23, occupancy hit 60.41%, and the average daily room rate increased to $236 per night, which is 5% above the previous year.
In his letter introducing the FY23 audit report, Discover Newport CEO Evan Smith also attributed the increase to the rebound of the international, business and cruise ship markets this year and the ongoing trend of people leaving metropolitan areas and cities for resort destinations like mountains, lakes and coastal towns like Newport.
Additionally, the organization’s net position increased by $398,000, which the audit attributes to HBO’s "The Gilded Age," parts of which are filmed in Newport, postponing its release to fall 2023, just months after FY23 came to a close. The audit states Discover Newport will use these funds to advertise for the program.
What do they spend this money on?
Discover Newport invested about $4.5 million in events like Newport Restaurant Week and Burger Bender as well as seasonal campaigns for fall, spring, winter and for the holidays, focusing specifically on drawing in tourists from “feeder” markets like Massachusetts, Connecticut, New York, Philadelphia, Baltimore, Washington, D.C. and Virginia, according to the audit. The organization also sponsored R.I. Public Transit Authority’s Line 67 bus route and several events throughout the city of Newport, including Newport Winter Festival, Christmas in Newport and the Ocean Race stopover in Newport.
Since Discover Newport is dedicated to marketing Newport and Bristol counties as a tourism destination, 57% of the organization’s expenses for FY23 were attributed to leisure and marketing, while another 26% was attributed to sales and marketing. The audit states the organization updated its functions “to be consistent with industry standards set by Destination International, which required Discover Newport to reclass $162,000 of its advertising costs as a “sales and marketing,” which is why the category saw a 40% increase from FY22.
Looking ahead to 2024
The audit lists a series of priorities Discover Newport has for 2024, which began in July. Like the previous fiscal year, the organization is hoping to invest in promotion of the shoulder, or off-season, as it states the summer months are reaching maximum visitation capacity. The organization is also hoping to work with the city of Newport, Department of Transportation and RIPTA to establish a shuttle service from public parking lots to Newport’s downtown area.
Smith stated in his letter that the organization is also keeping a close eye on the economy headed into 2024, as inflation is still at a 40-year high. He anticipates a slowdown in the leisure market but expects a 100% recovery in the business market. At the Discover Newport Board of Directors' November meeting, Vice President of Sales Tim Walsh said the organization has also been focusing on bringing back the international tourism market that shrank during the COVID-19 pandemic.
This article originally appeared on Newport Daily News: Tourism in Newport, RI, has record year aided by 'Gilded Age'
