By Mark R. Smith, Contributing Writer
Andy Levine uses a line that you may have heard to illustrate today’s landscape in the tourism industry.
“The industry has been decimated by COVID-19,” said Levine, chairman of Development Counsellors International (DCI), in New York City, who quoted boxer-turned-comedian Mike Tyson’s take on how the world can change in the blink of an eye − or from a quick left jab.
“Everybody has a plan,” he said, “until they get punched in the mouth. And the tourism industry has been punched in the mouth.”
The tourism industry is hardly alone on the receiving end of the financial wallop that has addled many minds, as well as the world economy. However, as businesses reopen in fits and starts in the U.S. and around the globe, industry professionals are starting to welcome back regional travelers as they begin to venture back to haunts old and new, and the industry begins to rebuild.
On the Road Again
Levine thinks the market will return, albeit somewhat slowly, first on the ground.
“People will initially travel in their cars, then perhaps later this year they may begin to fly domestically before flying internationally again. The issue at the moment is that most people are not comfortable at this time flying on a plane,” he said, before querying, “How do you socially distance on 737?”
The answer is that, in lieu of a sparsely crowded flight, passengers can’t distance on a plane. But that fact also doesn’t mean that there won’t be considerable pent-up demand when the right time comes.
That will start with “a spurt of travel, probably with some regional flights, like a two- to four-hour trip,” Levine said, “and there will be some attraction to renting single houses from AirBnB. They will have to be thoroughly cleaned before they’re rented, [but also know that] there will be less contact with other people [because the renters will be] outside of a hotel.”
Travelers will still have to wear masks, social distance and be careful, of course, wherever they go. “It will be interesting to see how the summer shakes out, but I think the fourth quarter of this year is when we’ll start to gain some real momentum,” he said. “It won’t be 100 percent, but there will be a noticeable pick-up.”
Levine’s colleague and the president of DCI’s tourism practice, Karyl Leigh Barnes, believes that leisure travel will help to spur the return of business travel. “As individuals become more comfortable with leisure travel by car, they will slowly regain the confidence to travel for business by air,” she said.
One group Barnes thinks will start travelling again earlier on will be, interestingly enough, site selectors.
“Companies have recognized that employees can work successfully at home and realize that many employees are not interested in returning to full-time work in office buildings located in densely-populated cities,” she said. “That means certain companies will begin to look for more affordable pastures that still allow them to capitalize on the presence of skilled labor. Who will help these companies find their location of the future? Site selectors.”
Barnes recalled that one of the early indicators of recovery she saw after September 11, 2001 was “when people who are not from their city of residence live through a traumatic event, they often opt to move back to their home cities,” she said. “If they’re at a certain point in their lives, like just starting a family, they may take the opportunity to relocate. Or, in this economy, if they have lost their job and are unable to replace it, they may look to return to their hometown. I think that will be part of the process as the world moves back toward normal.”
This trend will be key with employers, because they want to locate and create opportunities in places with a large, skilled talent pool. “While there will be ongoing unemployment in certain sectors,” she said, “industries such as technology, pharma and health care will continue to need more workers.”
“This trend will tie back to travel by the nature of one’s contacts,” Barnes said.
“When the pandemic is over, skilled labor and business executives alike are going to want to see family and friends they’ve been cut off from. So, site selectors will be working with at least some decision makers who will have gone home to visit family and then think, this city would make a great location for our next expansion,” she said.
As also happened after September 11, 2001, “Many of those cities will be ‘tier two’ markets, like Charlotte or Indianapolis,” said Barnes. “These cities boast an enviable list of cultural attractions, easy access to outdoor experiences and an enticing culinary scene, making them attractive as a place to visit and a place to live.”
DCI research shows that before a company expands, the decision makers want to know the status of the location’s cultural amenities such as the local arts community, said Barnes. “People who work hard also want things to do in their free time that inspire them. Employers are recognizing that access to experiences carries as much weight as the cost of living if they want to keep their talent engaged long-term.”
As the comfort level grows with leisure travel, more active business travel will follow. “It’s early yet, but there will be pent-up interest for exchanging ideas with other executives,” she said. “That’s why I think corporate executives will be the first to spend money on business travel.”
“While you can accomplish quite a bit via zoom in the short-term, I’m already speaking with corporate executives who are experiencing serious Zoom fatigue and are ready to hit the road when they know it’s safe to do so,” she said. “While I don’t anticipate there will be rush for attending a 1,000-person conference, high-level, executive roundtables are starting to look very enticing after (more than) three months of lockdown.”
And where might these roundtables take place? In those second-tier cities, where the presence of COVID-19 has remained lower and travel amenities, including hotels, restaurants and cultural experiences, are already starting to reopen.
To get that word from closer to the street, the Lexington, Kentucky-based National Tour Association (NTA) surveyed it membership, which consists of tour operators who work with various industry sectors that put together travel packages. Today, with many convention and visitors bureaus operating with reduced staff, the findings were stark.
In terms of cancellations, layoffs, furloughs, etc., 79 percent of tour operators had refunded customers due to cancelled trips or simply did it themselves; operators also have refunds from vendors. In addition, half of industry tour operators made refunds to customers prior to receiving money from vendors, meaning the hotels and the airlines.
As for those numbers, “All told, of our 518 member tour operators, 59,000 trips were cancelled, affecting more than 1.8 million travelers; and they have made nearly made $1 billion in refunds,” said Bob Rouse, NTA spokesperson. “So they were chasing down Paycheck Protection Program (PPP) loans to keep their staff stable during the crisis.”
On that note, Rouse said going a certain route often resulted in a faster link to paydirt: “Many of them said it was advantageous to have a relationship with a community bank when applying for PPP loans.”
Moving forward, Rouse observed that many NTA members “have been doing good, creative things during the downtime, such as building databases and rearranging the visitor’s centers; one business owner in Milwaukee was mailing food samples, as another for instance.”
And there are eyes cast for the light at the end of the tunnel, for whenever it starts to brighten. “Some people are letting tour operators keep their deposits until the next opportunity to travel arises,” he said.
Josh Noble, tourism services manager for the City of Kingman, Arizona, has also been tracking various industry trends, particularly the local restauranteurs and hoteliers.
First, the eateries. “Some mom ’n pops initially closed and others restaurants dropped the number of employees by about 85 percent earlier in the crisis,” Noble said, “but now, virtually all of our 80 dining establishments have reopened. Earlier on, it helped that the state relaxed some laws “to help with places that offer carry-out,” he said, “though the sit-down bistros have obviously had a harder time.”
What’s interesting in a locale like Kingman is that the locals supported the mom ’n pops by buying gift cards, while most of the chain restaurants get solid support from outside of a 50-mile radius, much of which is truck traffic. “We’re located on I-40 and the future I-11, so we get plenty of visitors,’ he said. “That’s helped in this difficult market.”
“Also,” Noble said, “all of Kingman’s 36 hotels, which are on the essential business list in Arizona, all stayed open. We have 1,700 rooms in town. That’s helpful for the truckers who use I-40 and have continued working. Since April 16, we’ve had eight weeks of continuous improvement.”
Going forward, he echoed what Levine and Barnes said about the public starting to creep out in search of new or even normal adventures after a quarantine. What we’re seeing is that people will not want to go on plane trips, but will instead opt for road trips in the comfort of their own cars that will be easier to plan, afford and negotiate − especially since people have already been staying in for upwards of three months.”
“More people have been spending time outside of late because there wasn’t much else to do,” Noble said, “and I think that’ll spur more of that type of trip and the pent-up demand will help spur the economy forward.”
One destination that’s famous with the day trippin’ crowd is Hershey, Pennsylvania.
While Allison Rohrbaugh, spokesperson for the Visit Hershey & Harrisburg, has been awaiting the word from the state before inviting tourists back to town and to see some new attractions, she and her crew are working with the tourism community to continue the reopening process so those day trippers can return and enjoy their visits.
The recent addition of Hershey’s Chocolatetown to Hersheypark had to be put on hold due to the pandemic, although construction had resumed by early spring; also, the new roller coaster at the amusement park has undergone its first test runs.
“We’ve progressed to the yellow (second) phase, which allows for phased reopening of retail stores, with limited capacity, and outdoor dining as of press time,” Rohrbaugh said, “and we’re looking forward to getting an opening date for Hersheypark.”
But there has already been movement in other areas, too. State golf courses have been open since mid-spring, as have mini-golf courses and marinas; hotels have been accommodating medical personal as well as the public in cases of special need, like hosting families with sick family member in a nearby hospital. “[Hoteliers] are taking extra precautions to keep the rooms [and common space] sanitized,” she said.
Back to the theme of outdoor attractions, Rohrbaugh said local Dauphin County parks, such as Wildwood Park and Detweiler Park, have also been popular locales to visit. Today, the area’s recovery task force is further discussing industry protocols “so we can get on the same page as we move forward and ensure that we have visitors feeling safe and welcome here.”
Rohrbaugh and the task force are hopeful that Hershey, a “drive” market that’s nestled within about three hours of 40 percent of the nation’s population, will be an early stop as more people feel ready to travel again, partially due to the outdoor events.”
Scott Balyo is executive director of Richmond, Virginia-based Capital Region USA, which focuses on international leisure tourism. He, too, is focused on the significant challenges in that market and referred to Levine’s (and other’s) observations.
“Since we’re still [immersed in] the epidemic, with few willing travelers and visa restrictions in places like China and India, there are few overseas flights operating at this time,” Balyo said. “We need to get people back to feeling confident about travel – by first going to a local state park, for instance, then venturing farther from home and rippling out.
“Eventually, our overseas travelers will return, too,” he said. “We saw that after Septeber 11, 2001 and after the recession in 2008-09. Travel is resilient.”
But for now, to resume traveling for leisure or business, there are three factors to consider, he said.
“First, where are people psychologically? Are they in the right mindset to travel? Do they feel safe leaving home?” Balyo queried. “Next, can people travel? Are attractions, hotels and restaurants open? Are airlines flying the routes needed to get people where they want to go? And finally, do people have the means to travel? With the economic fallout from this, there will be some segments of the population unable to travel, or travel very far, due to financial constraints.”
While 2020 will be a difficult year, “travel will come back,” Balyo said. “I think everyone recognizes that. But, if we can get people feeling good about travel again by the end of the year, 2021 could [represent] a real bounce back.”
“Now is the time,” he said, “as challenging as it may be, for destinations to still let people know they’re ready for them when they return.”
About the Author
Odenton, Maryland-based Mark R. Smith joined Expansion Solutions after having written about site selection among the vast number of topics he has covered in the business universe. That part of his career began in 1993 when he joined The Daily Record, a Baltimore business and legal publication, where he delved into the worlds of economic development and commercial real estate, among numerous other industries; in 2003, he was named editor-in-chief of The Business Monthly, another Maryland publication that covers the scene in the Baltimore-Washington Corridor counties.
Concurrently, he’s written at length about the film and video industry for a variety of publications, and about his other loves, including music, sports and leisure.