High consumer spending and a stout increase in hotel-motel tax receipts were positive marks for the Bryan-College Station economy's second quarter, according to economist Karr Ingham.

"Retail sales in [Bryan-College Station] increased solidly in the second quarter, up nearly 4 percent compared to the second quarter of last year," said Ingham, who studies the local economy for The Eagle.

Likewise, hotel-motel tax revenue -- funds generated through a tax that lodgers pay while staying in area hotels -- grew some 15 percent in the first six months of the year, compared with the same period a year ago.

The local hotel industry drove much of that increase through higher rates -- not through increased occupancy, said Hunter Goodwin, president of College Station-based Oldham-Goodwin Group.

The real estate brokerage, development and management firm runs the local Hyatt Place and Hawthorn Suites properties.

"Hotel managers here are experienced at yield management," Goodwin said.

Barron Hobbs, general manager for the Hilton College Station Hotel, describes yield management as "realizing that the customer's willing to pay more for a room in higher-demand times.

"You have to manage your business more carefully when your occupancy isn't running high at a high-demand time," he said. "In the past, I think this market has taken the attitude that if you charge less, it will create more business. But that's not the case at all."

Occupancy rates year over year have held steady and in some months have actually been higher in 2008 than in the first six months of last year, according to data supplied by Smith Travel Research, a firm that studies the hotel industry nationwide.

And revenue per available room, or RevPar -- the measuring stick hoteliers use to gauge their financial performance -- has generated double-digit year-over-year growth for every month of 2008 except for June.

Average RevPar for local hotels was $54.94 for June -- the second-highest RevPar the local industry has seen for the year to date and the most recent statistics available.

By comparison, RevPar for the national hotel industry has seen a mix of only single-digit year-over-year growth and slight decreases for the first few months of 2008. Occupancy rates have decreased year over year for every month of the current year.

Since the hotel-motel tax revenue boost locally is tied more to rates than to occupancy, Goodwin said, the revenue increase also doesn't indicate any real surge in tourism.

The local hotel market has grown in recent years, while the number of visitors to the hotels -- primarily driven by Texas A&M University -- has not grown much, local hoteliers said.

Rachel Williams, director of hospitality, revenue and sales for Oldham-Goodwin, said local hotel managers look to other business, not just state and federal government workers -- who pay a relatively low per-diem rate.

State and federal per-diem room rates have not been adjusted in several years, she said.

Airplane boardings

Enplanements at Easterwood Airport were down substantially for the first few months of 2008. However, Ingham said, the figures were not as much of an indicator for the tourism industry as the hotel-motel tax revenue figures.

The enplanement total for the first seven months of 2008 was about 4,000 fewer than the same period in 2007.

"A majority of people have tightened the belt because of the fuel prices," said John Happ, Easterwood Airport's director of aviation. "That means they've probably eliminated some trips or had to curtail leaving visits, like sending their kids to see Grandma."

And consumers still haven't seen the effect of all the cuts the airlines have made in axing more than 1,000 aircraft, Happ said.

The College Station airport lost only one aircraft in the midst of those cuts; Continental Airlines is replacing its one regional jet with a smaller turboprop aircraft.

American Eagle, the other airline in operation at Easterwood, has opted to replace three 34-seat SAAB turboprop aircraft with three 50-passenger jets. But the airline's fall flight schedule will push its earliest flight from Easterwood to Dallas/Fort Worth International Airport back three hours, to 10:50 a.m. The latest flight back from Dallas will depart at 3:24 p.m.

American Eagle recently asked Happ about the possibility of getting financial assistance through the start of 2009 -- an offer the airport also would have to extend to Continental. Happ has given presentations to several local governmental entities, but no offer of incentives has been made.

Continental Airlines runs four flights daily to and from Houston Intercontinental Airport, and American Eagle runs three flights to and from D/FW Airport.

"We're optimistic for the future, because like any business, it's supply and demand," Happ said. "If there's a demand, and we continue to grow at the rate we're growing, there will be a demand for some kind of service."

Employment

The Bryan-College Station economy tied for third among the state's 23 metro areas for employment growth -- 2.8 percent over the last 12 months, Ingham said.

"In a year of generally slowing employment growth in Texas metro areas, the B-CS economy has been working its way up the comparative chart of employment growth," Ingham said.

The Bryan-College Station employment base has grown to 91,900, according to Ingham's year-to-date average. The unemployment rate on a year-to-date average slid 0.1 percent, to 3.6 percent.

And the forward-looking Manpower Employment Outlook Survey indicates that more than one-third of local employers intend to add staff in the third quarter, he said.

"So growth in 2008 is steady, not spectacular," Ingham said. "But of course this would not be a year in which we would expect to see spectacular growth, given a national economy that continues to struggle, the travails in the credit and financial markets, high energy prices, a 5 percent national overall inflation rate [and] continued deep declines in housing."

Homebuilding

Despite those deep national declines, the local homebuilding industry's declines have not been as deep as they have been in a number of other metro areas around the state, Ingham said.

"The number of existing homes sold has flattened since early 2007, but given what has occurred in other areas [not so much in Texas] and nationally in the residential real estate market, flat is a decent outcome, especially given the fact that home values have not nose-dived in B-CS," Ingham said.

The second-quarter average home sale price was down about 2.7 percent compared with the second quarter of 2007 -- but was more than 15 percent higher than in the second quarter of 2006, Ingham said.

Year to date, the average is down just slightly from a year ago, but the mid-year 2007 average was more than 12 percent higher than the previous year's.

New home permits sank 11.2 percent year to date, to 438, according to Ingham's economic indicators. However, average home sales prices have remained relatively steady, declining only 1 percent to $164,998 in the year-to-date figures.

Other indicators

Higher retail spending and strong employment growth indicate continued economic growth, Ingham said. But that growth clearly will occur at slower rates than it did a couple of years ago, he said.

"The current growth outcome looks even better among the backdrop of a continued sluggish national economy, rising prices for motor fuel and other energy products, as well as a host of other goods and services and mixed indicators in the non-core [consumer and employment] sectors of the B-CS economy," Ingham said.

Retail sales climbed, as did inflation-adjusted dollars spent on new and used automobiles -- which grew more than 10 percent for the quarter, and just under 10 percent for the year to date.

Auto sales were $160.7 million for the year to date.

• Holli L. Estridge's e-mail address is holli.estridge@theeagle.com.

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