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Bad news for the local economy. In a report
released last week, Smith Travel Research, "the recognized leader for lodging industry benchmarking," found that Nashville's hotel occupancy had dropped 31% versus last year's numbers. At this point, just over half of all the rooms in the city are filled.
Of course, compared to this time last year, every city is doing less business. But Smith Travel says Nashville is doing the least less; our drop is the largest of all Top 25 markets nationwide.
This information comes out around the same time that the city announced it'd lined up developers for the convention center hotel. The 1,000 room anchor that is supposedly vital to the success of the Music City Center.
That 1,000 more rooms are being added to a market that, in this current climate, is already oversaturated is alarming. What's worse: We're one step closer to paying for the whole thing.
Yesterday's Tennessean article
announcing the developers included the line: "The hotel could be financed with a mix of public and private money or entirely with public dollars." That marks one of the first times someone has publicly acknowledged the obvious: the city is going to pay for this hotel.
It's the same scenario playing out in Dallas, D.C., St. Louis and Salt Lake. The bond market is awful and private companies are too smart to put themselves at risk. Cities that claimed to have private-public options concede, at the last minute, that no, their only option is to build it themselves. And all this while the revenue streams they'll use to sell bonds are going down.
City leaders are going to say that hotel and tourism will bounce back. And they're right. But if everyone is doing the same thing, if everyone is putting up their own money to build these hotels based on the assumption that while visitors have slowed to a trickle, we're soon due for a flood, doesn't that mean someone's going to be left all wet?