While South Dakota’s legislators kick off the 2022 legislative session, Pierre and Fort Pierre readies for the influx of visitors and added business the session brings to the area.
Pierre Economic Development Corporation Chief Operating Officer Jim Protexter said the legislative sessions bring a needed revenue boost to the area in what would otherwise be a slow period for Pierre.
Protexter reported Pierre received a 5 percent increase in hotel traffic during the 2021 session compared to other similar cities, spending $340,000 in new revenue.
“We would just flatline,” he said. “We have a good stable economy. We do, you know, $600,000 to $700,000 in taxable sales in a February, but without that, we would have flatlined, which I’m saying is at least 5 percent below that. So, it’s a huge bump for us. We’re so fortunate to have that really with the weather that we have.”
Protexter added that the State Legislature meeting annually instead of every other year is also fortunate for the area.
“It takes us from hunting into fishing,” he said about the increased visitors during the session. “It covers two and half months of what would normally, compared to those other communities, is a pretty flat time. It really bridges our economy between different outdoor seasons.”
Protexter also reported constituents likely visit at three times the typical rate, potentially adding a little more than $1 million in spending.
Pierre Mayor Steve Harding found there’s no doubt about it getting busier in general during the session’s primary two months — January and February.
“The motels, the restaurants and filling stations are much more active,” he said. “So there’s definitely more activity in the community, more people coming to Pierre to testify on different bills, lobbyists coming to Pierre to stay for that time and legislators.”
Harding said sales tax figures show January pulling in good revenue, with a slight drop for February.
“For the sales tax for motels and restaurants, that certainly is better during the January-February time,” he said. “Legislators come here. They live here for two months. As far as retail sales, we don’t break those things down as types of goods or anything like that. Just looking at the sales tax revenue, the majority of the boost that we do get is from the motels and restaurants.”
But it doesn’t mean there aren’t challenges for local hotel owners amid changes in the industry and coronavirus impacts.
Baymont Inn & Suites and Super 8 owner Rick Patel said business coming through his two hotels on Sioux Avenue aren’t what they used to be during the legislative session.
He found that snowbirds headed to Arizona and other warmer locations who rent their homes to legislators during the winter took a bite out of what would be a steady two-month income.
“The business that we used to have, we no longer have,” Patel said.
While non-legislator visitors, such as lobbyists and others, may rent hotel rooms, Patel said business is less of a sure thing during the session.
“They tend to stay there,” Patel said about the visitors. “But the thing of it is, those guys are there for one or two nights. They’re not there for the continuous season. What makes money is the continuous occupancy.”
But he said the legislative session does help get the industry through the winter. Patel estimated the session accounts for about 35-40 percent of his business conducted during January, with February slow.
Patel said he is also on the City of Pierre’s Business Improvement District No. 1 Board of Directors. He said the board compares Pierre’s business to similar cities using reports showing how the area stacks up in terms of occupancy and rates.
“Yes. January is better for us than those guys,” Patel said about cities like Aberdeen, Watertown and Mitchell. “But that goes with being a capital. But a lot of us, other hotels, see a lot of Canadian goose hunters during January too on the weekends.”
Patel also pointed to the pandemic causing more in-person meetings switching to online platforms, impacting the need for hotel rooms. And he said that could become a potential concern should online meetings increase in popularity after COVID-19 ends.
While changes may have long-term impacts on the hotel industry, area businesses could still see increased traffic. And it’s not limited to just those within Pierre’s city limits or Hughes County.
Fort Pierre Mayor Gloria Hanson found the legislative session increases traffic on her side of the river.
“We really don’t know exactly what the numbers are because we don’t know what the numbers are during that time of year without the legislative session,” she said. “So, we don’t really have anything to compare it to, but we know that impact on any and all of the hospitality businesses is significant. That would include our four hotels and motels. That would include all of our restaurants and bars and the convenience stores.”
Hanson added they also make up a significant total of all Fort Pierre’s total businesses.
“While we don’t know exactly how the legislative session and the activity that surrounds that, we don’t know how much it affects our revenue stream, but we know it’s good,” she said. “So, we appreciate having that legislative session in Pierre right next door to us.”
There is also a potential benefit that is equally hard to quantify. Hanson said you would have to think the increase in visitors also provides an opportunity for increased exposure for possible future visitors and residents.
“Because many times during legislature, there are schools and other visitors to the Legislature,” she said. “There are lobbyists that come in. There are other organizations that come in to be involved in the process. So, yes, it certainly does expose others who will come back during the summer and enjoy our summer activities and events.”