After 1.9 million nonresident travelers visited Kalispell in 2022, hospitality and travel industry leaders say tourism could slow down this year in northwest Montana compared to recent years due to the high inflationary costs of travel and an uncertain economy.
“We’re certainly hearing from travelers in national surveys that the high cost of travel is impacting travel plans and causing them to cancel some trips,” Discover Kalispell Executive Director Diane Medler said at a May 17 Kalispell Chamber of Commerce luncheon.
According to a Destination Analysts survey conducted in March, 60.4% of people are being cautious with money due to recessionary concerns. In the same survey, 43.9% of people said that high travel prices have prevented them from traveling in the past month.
Although inflation is easing, with an annual rate of 4.9% as of April compared to 7% in 2o21, it’s still well above the 2.1% annual average reported from 2000 to 2020.
“Obviously, we know everything costs more,” Bryce Baker, the general manager of My Place Hotel in Kalispell, said at the luncheon. “It costs more to do business, it costs more to travel, it costs more to buy groceries, so everything is more expensive. It will start to decrease tourism with the costs of everything from airfare, to buying gas to hotels. It will start to decrease. We’re not at that level yet, but it’s coming if inflation doesn’t come down.”
Baker said that while flight numbers at Glacier Park International Airport are rising, hotel and lodging occupancy is lagging.
“It’s really interesting to see how little occupancy we have in some of the shoulder months … We’ve got a lot of room for growth,” Baker said.
Comparing March 2022 and March 2023, there was no growth in the hotel occupancy rate, which was below 50%, according to lodging data. March 2023 occupancy in Bozeman was at 74% while occupancy was 61% in Great Falls.
“Everybody beat us,” Baker said. “The fact that Great Falls beat us in occupancy says a lot.”
Last July, Kalispell hotel occupancy was at 78% compared to 86% the year before. January occupancy has consistently ranked the lowest below 40%.
Additionally, short term rentals like VRBO and Airbnb listings continue to grow. Rentals in Kalispell grew from 50 in January 2021 to the current number of 153, according to AirDNA data.
Short term rental occupancy is typically around 80% during the busy summer months while the rate hovers around 50% during the shoulder season, drawing business from travel nurses, families and sports teams.
In Flathead County, there are 2,200 rental units on Airbnb and VRBO daily with average rates of $400 per night in the summer.
“That’s a huge number of residences that are being rented to the traveling public,” Baker said. “Obviously this matters to us because it hurts our occupancy. Overall, it’s good for some people but it definitely hurts our business.”
As Glacier National Park continues to attract visitors in the summer, Medler says Discover Kalispell is working to promote the offseason with events like the Montana Spartan Race in May, which draws thousands of competitors across North America.
Destination marketing organizations are also focusing on responsible recreation during the summer, where outdoor etiquette and education is promoted while visitors are encouraged to seek outfitters and guides.
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