2009: Setting the stage for more prosperous years to come
Gordon Snyder, Chair

The old saying, "what doesn't kill us will only make us stronger," is a good way to describe 2009 for Northern Kentucky's hospitality industry. It certainly wasn't pretty, but it was a great opportunity for us to re-evaluate our positioning and we're confident that the strategic moves the Northern Kentucky Convention & Visitors Bureau made in 2009 have positioned us for future success.

2009 Results
A deep recession, unemployment levels above 10% and continued service cuts by Delta Air Lines at the Cincinnati/Northern Kentucky International Airport (CVG) were key factors in decreases locally. Northern Kentucky's 51.5%, three-county hotel occupancy was down 10.3%, driven by a combination of a 4.8% increase in room supply and a 6.1% drop in demand. The result of three new hotels opening in Northern Kentucky last year, our supply growth far outpaced that of any city in our region or competitive set. It also exceeded the national average of 3.2% and fueled a buyer's market that helped drive Average Daily Rate (ADR) down 6% and RevPar or revenue per guest room down 15.7%. Despite a lower supply growth rate than Northern Kentucky, U.S. hotel occupancy also fell 8.6%, ADR 8.8% and RevPar 16.7%.

Bureau Strategic Initiatives
Anticipating a drop in revenues in 2009, the Bureau strategically allocated funds and re-focused our sales efforts on markets that held the most opportunity. We hired a full-time sports market salesperson to capitalize on the new Bank of Kentucky Center and a thriving local sports market. Hard work from our entire sales team, in conjunction with an expanded sports market, produced an impressive 12% increase in group business booked by the Bureau. In fact, $11.28 was returned to the community for every dollar spent by the Bureau it spent in 2009, an 8.63% increase over economic impact in 2008. That's an impressive illustration of doing more with less in a difficult year.

We're anticipating another strong group sales year in 2010 with this newly powered up sales team. Our promising new "Are You the Next Big Attraction?" program is designed to generate sales leads for group business of all sizes. Air fares are down approximately 40% at CVG since Delta initiated its new fare structure in early 2009, making us more competitive as a group travel destination. And, our support of the Cincinnati USA Regional Tourism Network (RTN) continues to show it's a good investment. RTN reported that 53% of people who requested information through its web site visited the area last year—well above the industry average of 39%.

As 2010 unfolds, we believe we are positioned for more prosperous years ahead, with a world-class airport, great attractions, hotels and meeting facilities and a convenient location in the heart of America. We pledge to our stakeholders to be an effective and efficient sales organization that will make decisions based on sound business principles while keeping costs in line with the assets trusted to us.