Westchester Rolls out the Welcome Mat

The numbers are impressive: Travel and tourism in Westchester grew 14 percent from 2010 through 2014, contributing an all-time high of $1.74 billion to the county’s economy and supporting 23,681 jobs in 2014 alone, the most recent year for which data is available. County Executive Rob Astorino has said the county is on track to eclipse even those lofty numbers in 2015. But as any traveler knows, few journeys are trouble-free. Looming operating-cost increases, disruptive technologies, and basic supply-and-demand economics threaten to raise roadblocks along the path to prosperity for many players in the travel business.

“We have seen visitor spending grow,” says Natasha Caputo, director of Westchester County Tourism & Film. “Best of all, spending is only counted for nonresidents, so it’s all new money to the local economy.” The lodging, transportation, and recreation segments account for slightly more than half the amount visitors spend here, but the retail and food-service industries rake in significant dollars from tourists, too. (See “Big Spenders,” page 28.) The industry also annually generates more than $100 million in local hotel, sales, and property taxes. 

Surprisingly, recreational visitors represent 30 percent of the total revenue, with business travelers accounting for the rest, according to Caputo. “About 20 percent of that 70 percent is group business for meetings and conventions,” she adds.

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Both market segments are strongly affected by the wider economy, of course. Visitor spending in 2009, for example, fell by $250 million from the 2008 total of $1.64 billion, a direct response to the Wall Street meltdown and the beginning of the Great Recession. The steady growth in years since represents the obverse.

Dan Conte, general manager of the Westchester Marriott and president of the Westchester Hotel Association, rates the current state of business as “Okay.” “It’s not robust, and we’re not bursting at the seams, but business is certainly not bad,” he says. Hotels in the county reported a 70 percent occupancy rate for 2014, a slight increase over the previous year.  

Supply affects that arithmetic, of course, and the county has seen a large jump in the number of hotel rooms and other accommodations. Caputo reports there are 6,554 rooms now in the county. That’s a major increase since 2008, when the total numbered 5,345. In just the past couple of years, six new lodging facilities have opened or broken ground in Yonkers, Peekskill, and White Plains. Existing hotels have made substantial improvements, as well, with Hilton, Marriott, Crowne Plaza, and Castle Hotel & Spa each spending millions on renovations here in recent years. “Our hotels continue to reinvest in their properties,” Caputo adds. “That’s a really good sign that we are a strong destination.”

While Conte is optimistic, the wave of new construction, he says, “probably has more to do with investment money than it does a robust hotel economy. The segment of hotels being built are smaller, limited-service facilities where the operating costs are much lower and the return on investment is quicker.”

Regardless of the reason for the new construction, the steady occupancy rate indicates that additional rooms are being absorbed by an increase in demand. While growing business travel (believed to have risen 2 percent nationally last year, according to the US Travel Association) provides a sturdy base, leisure-travel attractions in Westchester have stepped up their game, as well.

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“Out-of-Westchester tourism is extremely important to us,” says Howard Zar, executive director of Lyndhurst. “The absolute busiest time is October. About 150,000 people come into Sleepy Hollow for Halloween and leaf season. We do about one-third of our mansion tours that month.” July and August are busiest for foreign tourists and domestic tourists coming from out of the region, and Christmas generates a lot of traffic, too, he notes.

“We’ve undertaken a wide variety of restorations in the last three years,” Zar points out. “Our bowling alley opened in May; the tower and laundry room open this summer. Our major fashion exhibition opened in June. Our summer jazz programs on Thursday nights usually draw about 1,000 people to our lawn.” Lyndhurst also recently received a state grant to restore the lower landscape of the estate, a million-dollar project.

The tourist trade is also a big part of the balance sheet at the Katonah cultural center Caramoor, notes its executive director, Jeffrey Haydon. “About 50 percent of our tickets are sold to people outside of Westchester,” he says. “Around 15 percent to 20 percent come from New York City. The same percent come from Connecticut, and the rest come from other areas. For some of our destination programs, like opera, people come from Boston; Washington, DC; and Philadelphia. Opera draws from all over because people are willing to travel for programs like ours, which are rarely performed.” Caramoor’s Jazz and Roots music festivals also pull from wide areas.

Travelers have actually shaped the business model at the renowned Pocantico Hills restaurant Blue Hill at Stone Barns. “On any given night, well over half our clientele come from outside the county,” explains co-founder David Barber. “As a restaurant, we struggle with that because you want a local clientele to support the place and people in the neighborhood to feel they can stop by. When people look at it as a destination in the midst of their business trip or are making a special trip up from New York, they expect kind of a grand experience.” His solution? “The meal is designed to be an adventure. There are no menus, and it’s a real surrender to the food experience,” he explains.

Those of us who are residents of Westchester often forget that the county offers a wide variety of recreational opportunities with great appeal to visitors. “There are really four or five Westchesters,” Zar says. “The people coming to Lyndhurst, Kykuit, and Stone Barns are seeing something completely different from those who go to SUNY Purchase and the PepsiCo sculpture gardens. There’s Caramoor, the Katonah Museum, and the John Jay Homestead in another area. There are many different experiences.” Caputo points out that major travel reviewers, like Frommer’s, Lonely Planet, and National Geographic Traveler, have all named Westchester and the Hudson Valley as a top destination.

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Big Spenders

The food-and-beverage sector benefits the most from visitors to Westchester, but tourists also spend money on lodging, shopping, and transportation.

Sector  $ (millions) % of Total
Food & Beverage 437,750 27
Lodging 378,373 22
Retail 349,481 20
Transportation 347,640 20
Recreation 155,734 9
Second Homes 32,742 2
Total  1,737,720 100

Source: New York: Economic Impact of Tourism, NYS Dept of Economic Development, 2015


The county has a strong travel-and-tourism industry from a revenue standpoint, but a couple of outside factors have the potential to impact its bottom line. One is escalating labor costs. “We are a very labor-intensive industry,” Conte points out. “Just to sell one guest room, I need a desk clerk to check them in; I need somebody to answer the phones, to clean the rooms, to maintain them, and someone to feed them breakfast the next day.” 

Much the same holds true for restaurants and brick-and-mortar retailers who cater to the travel trade. The recently enacted hike in the New York State minimum wage is bound to affect most operators to some extent. “The bigger hotels are probably over the minimum wage anyway,” Conte says, but, “In the long term, when minimum wages go up, there is concern that all wages will go up. It’s always a trade-off. When wages go up at a greater rate than revenues, jobs are affected. This year, for example, I may have 250 employees whereas next year I may have only 230.”

Additionally, there are new competitors nibbling at segments of the industry. Uber competes with taxis and limo services for both business and vacation travel to and from airports and other destinations. Airbnb adds a whole new raft of rooms to the county’s lodging industry, although Caputo points out that few business travelers currently use that service. She monitors it carefully for its effect on leisure travel, however. 

“Technology affects business travel, too,” Conte says. “People are working from home offices and are video conferencing, for example. There are a lot of moving dynamics that affect travel spending.” 

There are a couple of additional factors, which aren’t new but affect the business nonetheless. The first is our proximity to the Big Apple. “That’s the good news and the bad news,” Caputo says. “We position ourselves as an extension of the city for visitors through Metro-North and Amtrak because New York City day-trippers are top prospects for us.” New Yorkers not only visit popular cultural destinations, she says, “They come to hike and bike and pick apples, too.”

The second factor is the county’s lack of a large and sophisticated meeting-and-convention facility. “Other tertiary markets, like Hartford and Springfield, Massachusetts, have state-of-the-art convention centers that attract dollars from outside,” Conte observes. “Premier exhibit space in Westchester would help that. The County Center is good for what it does, but it’s not what a large association or trade show would take advantage of to bring a large group into the county. Westchester has a lot to offer, so great exhibit space would only complement it and be a significant engine to bring groups into the market.”

All industries face challenges of some sort, of course, and the travel-and-tourism business in Westchester isn’t backing down in the face of the ones it sees. Caputo points out that her office partners with numerous destinations, like Historic Hudson Valley and Empire City Casino. It’s rolling out promotional efforts for wine and craft-beverage tours, African American history, and farm-to-table dining, as well as retargeting trade-show activities, hosting more networking events, and encouraging site visits from travel media and meeting planners. “We’re not a one-feature tourism destination,” Caputo says resolutely. “We have the ability to grow.” 

 

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