One segment of the economy that has shown improvement in the Billings area is the lodging industry. STR (Smith Travel Research, Inc.) has been providing market data in North-American since 1985. STR and STR Global provides market data for thousands of lodging facilities representing 5.5 million rooms worldwide. They track performance such as Occupancy, Average Daily Rate and RevPar (Revenue Per Available Room) which provides vital management information for the Lodging Industry. The STAR Reports contain summaries and historical data to reflect how your property measures up against a chosen Competitor Set or Market.
The December report for the Billings Area included 50 properties representing 3,991 rooms. In addition to the current month numbers, they track the trailing 12 month period from November 2010 to November 2011 for Occupancy %, Average Daily Rate and RevPar and the percent change from 2010. These numbers are compared to other cities in the area and around the country. Two interesting sets of numbers in the December report were for Billings, MT and Bismarck, ND.
The report showed that in these two markets, the 12 month change has been dramatic. The occupancy in Billings increased 11% from 60.9% to 67.6% and in Bismarck (which already has good numbers) increased 5.9% from 75% to 79.4% occupancy. The Average Daily Rate for Billings increased 6.4% from $74.77 to $79.58 and in Bismarck increased 11.4% from $77.05 to $85.81. The RevPar in both cities increased a whopping 18.2% and 18.0% respectively, $45.50 to $53.76 in Billings and $57.78 to $68.16 in Bismarck. These increases were by far the best compared to other reporting areas including Western Montana, South Dakota, Madison, WI, Springfield, MO and Albuquerque, NM.
What has caused this? The only thing that really changed in our area is the continued energy resource development and the explosion of oil activity. In the Autumn 2011 edition of the Montana Business Quarterly they state that “new technology has opened up 4 billion barrels of oil in the Bakken, arguably the largest inland oil find in the U.S. in the past 50 years.” There is an ongoing effort underway between the Billings Chamber of Commerce and the Big Sky Economic Development Authority to develop Billings as an Energy Development Hub. The strategy is to position Billings as a destination of choice for energy companies, their suppliers and their employees. This past year has seen some of this effort take hold and start to come together with new energy businesses and services working out of Billings. Evidence of this is shown in the increased lodging statistics for the past 12 months in Billings. This is exciting for the lodging industry, for the City and for the Region.