Hotels and Residential Density

Daryl Nerl has a good piece on what boosters are saying about the Sands hotel:

Visitors who stay overnight, on average, spend three times as much during their visit as those who make day trips, Stershic said. In 2009, the Lehigh Valley had 3.9 million visitors who came to Pennsylvania as part of an overnight or multiple-day trip and 10 million day-trippers, Stershic said.

“One of the things we really want to do is convert more of those day trips into overnight stays because that’s where the real money is and that’s where we can really make a huge impact on employment and on tax base,” Stershic said.

With the opening of the hotel, the Sands now has about 1,800 full-time employees, said Mayor John Callahan. The city is conservatively estimating that there will be an additional $6.7 million spent by visitors as a result of the new hotel opening, he said.

I don’t know enough about the hotel market to comment on the numbers, but it’s worth emphasizing that the theory of change here tracks what I’ve been saying about the benefits of greater density in the core cities.

Overnight trips boost spending because overnight guests are more likely than daytrippers to go out for dinner, get some drinks at a nearby bar, and patronize other local businesses during their downtime. But the main mechanism at work here is that you’re putting 2-300 more people on Southside Bethlehem. It doesn’t especially matter whether they’re guests or permanent residents. The more people you can fit on Southside, the bigger the market for service sector business opportunities.