Lexington, KY - Lexington was fortunate to host the Alltech FEI World Equestrian Games in fall 2010, which provided a boost to the local hospitality business. The increased room rates gave major hotels the equivalent of an additional month's room revenue, and the increased number of tourists in town gave restaurants and attractions the opportunity to boost their visitor counts.
But hospitality in Lexington is facing major challenges - as it is almost everywhere. In 2009, revenue per available room was down 16.6 percent nationally. So even with 2010's 5.6 percent growth and 2011's predicted 7.8 percent growth, the industry is still below where it was in 2007. Restaurants entered 2011 coming off three years of negative real sales growth.
"As with just about any industry, the current state of the economy is probably the No. 1 critical issue facing hospitality," said Joe Fields, director of convention management for the Lexington Convention Center. "We've felt it in Lexington, though it's been an opportunity also."
Like many tourism leaders, Fields has learned to capitalize on the fact that Lexington is a secondary destination.
"We position ourselves as an affordable alternative to larger, more expensive convention destinations," he said. "Lexington offers drivability - due to our central location - affordable hotels and convention space, and other advantages like free parking and free hotel airport shuttles that set us apart. And over the last couple of years, we've seen great success in the convention business because of it."
Kentucky has another hospitality expert in George Ward, current executive director of the Coldstream Research Campus and former commissioner of Kentucky state parks and secretary of the commerce cabinet, with a bachelor's degree from Cornell University's School of Hotel Administration.
"Most hospitality-related businesses are trying to recover from the downturn in revenue during 2009 and 2010," Ward said. "Lack of sales usually means lack of funds to maintain appropriate staffing levels, reduction in hours of operation for restaurants and attractions, and the deferral of maintenance and capital projects. (This) also affects timely vendor payments, which can in turn affect the ability to purchase needed supplies. In time this causes the overall guest experience to suffer."
Usually after staffing cuts, hotels find ways to become more efficient and stay leaner than before the downturn. According to Ward, if outstanding service can be achieved with a smaller staff, the hotel will have more available funds to catch up on deferred maintenance and capital expenditures.
"Maintaining a hotel in a 'like new' condition is the best way to overcome threats from new competition and enables a hotel to achieve more than its fair market share of revenue," he added.
Another graduate of Cornell who has established himself as a tourism visionary is Hans Pfister, president and co-owner of Cayuga Sustainable Hospitality, which manages six award-winning sustainable resorts in primary travel destinations in Central America.
"For us in Costa Rica and Nicaragua, the combination of a very slow economic recovery after the crises together with climbing prices for airfare due to higher oil prices are the biggest challenges on the demand side," Pfister said. "On the hotel operations side, the biggest challenge is to compete with other sectors for the best human resources on the market."
Even though Lexington is a secondary destination, the same concern applies here in terms of people being the glue that holds hospitality together.
"I believe the major challenge for now and the future is attracting a healthy, well-educated, motivated workforce for all aspects of the hospitality industry," said Kentucky's tourism, arts and heritage secretary Marcheta Sparrow. "Strong training and employee relation programs provided by employers are well worth the investment."
The need for standards in employee courtesy concerns Carolyn Boss, national group sales manager for Golden Corral based in Forest Hill, Md., and the current tour supplier director for the National Tour Association, headquartered in Lexington.
"With the integration of a global travel mindset, we do not yet all share the same set of standards, customs or guest satisfaction," Boss said. "Treating guests with courteous manners (encourages them) to return to that establishment, reflecting a higher level of customer satisfaction. A uniform standard of acceptable etiquettes would be a significant improvement to everyone's experience globally."
Another challenging result of the globalization of the travel industry is the immediacy of information - whether right or wrong - on the Internet.
"With the explosive growth of social media, prospective guests have more information than ever available to them about past guest experiences at the hotels and restaurants they are considering," Ward said. "A bad review on TripAdvisor.com can have a negative effect on the business for months or years."
These and other challenges can be transformed into opportunities for growth by visionary leaders, and this requires a spirit of cooperation and partnership.
"How do we capitalize on the attention we received and the government investment made for the World Equestrian Games?" said Larry Bell, longtime general manager at Lexington's Hyatt Regency. "Clearly, the upgrades to the Kentucky Horse Park and the new facilities at the park will be bringing in additional shows such as the National Horse Show, which will help drive tourism on the northern end of our city."
Bell pointed out that we have an opportunity in the next few years to move Lexington's convention landscape forward in the same way that the Horse Park has benefited from the government investment in their facilities.
"The upcoming decision on how the Rupp Arena and Convention Center project comes together will have the same impact on the convention business in Lexington for the next 15-20 years," he said. "It is vital that the community makes the right decisions on this important public project so that we will remain competitive in the meetings market."
Frances Figart is a travel industry writer and editor living in Winchester, Ky.
Learn more at her blog site: francesfigart.wordpress.com.