Last week, when the cities of Columbus and Starkville released their sales tax income for July, they showed healthy increases in retail and restaurant tax revenue compared to July 2015. Hotel tax revenue, however, was off the charts — a 280-percent increase in Starkville ($49,291) and a 110-percent leap in Columbus ($27,977).

Hotel operators with properties in both cities say business is good, but probably not “that” good.

“Business is good,” said Mark Castleberry, who owns three hotels in Columbus and another in Starkville. “But it’s not like we’re popping champagne corks. I think those numbers may be something on an anomaly.”

Sunny Sethi, owner of Hyatt Place in Columbus and Hilton Garden Inn in Starkville has the same suspicion.

“I think those numbers are probably based some carryover from the previous month,” said Sethi, whose family owns 15 hotels in Mississippi, Louisiana and Alabama. “Across the board, our properties are up 15 to 20 percent (between this year and last year), but there’s no way we’re doing the kind of numbers the sale tax report suggests.”

Statewide, total hotel revenue for July 2016 compared to July 2015 was up by 2 percent ($208,456), according to STR, a data and analytics specialist that studies the hotel industry. Occupancy was up 3.5 percent. STR does not collect sales tax revenue data.

Over the past year, as the state has made across-the-board cuts to all state departments, processing and distributing tax revenues to cities has been delayed. That has resulted in unpredictable reports, as calculations of tax revenue collected in one month were delayed and later added to the next monthly report.

That is likely the reason for the big surge in hotel tax revenue. The arrival of Castleberry’s Courtyard by Marriott at the Mill at MSU in October 2015, accounts for some of the increased hotel revenue in Starkville in 2016, as well.

Even so, both Castleberry and Sethi say the hotel business, although prone to lulls and surges, has been steady and positive.

“We’ve seen a good stable market,” said Castleberry, who has built all three of his Columbus hotels in the past five years — Fairfield Inn and Suites (2011), Courtyard by Marriott (2012) and Hampton Inn and Suites (2014). “We want to be cautious because we know more rooms will be coming into the market with the Holiday Inn Express, and we’ll have to share that business. But our business has been building, and industry, Columbus Air Base, Mississippi State and the W all give us growth potential.

Sethi, who also owns the Hilton Garden Inn in Starkville, said Columbus is currently outpacing the Starkville property.

“I’ve seen a major shift,” he said. “More people are choosing to stay in Columbus. We’ve lost maybe 5 percent in Starkville. There is a new hotel (Castleberry’s Courtyard by Marriott), but I think more of that loss is from people choosing to stay in Columbus. I think Columbus is gaining a lot of new business and we’re seeing that trend. There are a lot of things to do downtown and a lot of variety of restaurants. That’s what we’re hearing from our customers.”

In 2010, when Castleberry announced his intent to build three hotels in Columbus, some doubted if the city could support the additional rooms.

When the Holiday Inn Express opens later this year, more than 500 new hotel rooms will have been added to the Columbus market in six years.

“The market is definitely supporting them,” Castleberry said. “The numbers show that.”

Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].

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