These are tough times if you are in the tourism industry. Toughest if, perhaps, you head an agency that oversees one of America’s most popular tourist destinations.
Ask Evan Smith. He’s executive director of Discover Newport, the tourism group that coordinates and oversees much of the tourism industry in a city that has been ranked 21st among the nation’s top 50 domestic destinations for U.S. Travelers by TripAdvisor, and among the top 30 most popular cities for tourists by Best Choice.
On Tuesday night he announced to his board of directors that he’s had to lay off 18 of his agency’s 22 employees, turn the Gateway Center into a self-service operation, and refer ticket buyers to online ticketing for the city’s tourist attractions.
COVID-19 has and will continue to disrupt an industry that in a normal year would bring millions of visitors to the city by the sea, more than a hundred cruise ships, major festivals and millions of dollars of income to the city, the state, and the tourism council.
“A lot of people are on the same road as us,” Smith says. “The whole industry will lose a lot of market share before a vaccination is found.” Estimates for that vaccination have ranged from a year to 18 months.
At Tuesday’s board meeting he grimly reported that Discover Newport, which receives 90 percent of its funding from the state lodging tax, “will receive minimal lodging for (mid-March till mid-May)…an expected loss of over $500,000 to our organization.”
Lodging forecasts for the next year, Smith says, suggest a 55 to 60 percent decline in lodging revenue. “That means our total revenue is projected to fall from $3.7 million annually to just over $1.1 million. Based on this very weak revenue forecast we have had to make many difficult decisions to reduce our expenses by $2.6 million for the next budget year starting July 1.”
Those decisions include:
- The reduction in staff from 22 to 4.
- Closing the information area at the Gateway Center for the remainder of the year. RIPTA bus operations will continue, along with other private tour operators. One area of the Gateway Center will remain open for literature (self-serve). Discover Newport will use a mobile visitor center van, and halt sale of tickets to attractions in person, referring visitors to purchase tickets online.
- Halt to all advertising and promotional trade shows.
- Elimination of non-essential expenses from the budget.
Meanwhile, Smith says the agency will look for other funding sources, and hope that as restrictions are lifted tourists begin to return. As they do, he says staff will gradually be brought back to work.
Discover Newport, Smith says, has applied for disaster relief loans from the SBA, has asked the Congressional delegation to lobby for 501C6 organizations (like tourism councils and chambers of commerce) to be eligible for payroll protection funds (PPP). In the first two rounds, 501C6 organizations have not been included. He’ll also ask cities and towns to include Discover Newport in Community Block Grant applications.
There is reason for hope, he says, as many in the industry await an end to restrictions that have virtually shut down the tourism and left many would be travelers leery of venturing out.
After 9/11 and the financial crisis of 2007-08 it was “regional travel that was the first to defrost,” Smith says. “People look to travel locally, not for long haul vacations.”
There is much at stake in Newport and beyond – the festivals, jazz, folk, and music; polo; numerous other events. Outside of Newport there are several events in Providence, and Washington County hosts the Rhythm and Roots festival, Seafood Festival, Washington County Fair and oceanside concerts and events that bookend the summer.
Smith says the festival and other events are waiting for the governor’s announcement on what social distancing might look like once the state begins to open, and once the state parks and beaches reopen.
And then much will depend upon the travelers and how willing they are to virtually put their toes back in the water, to again experience the magic of travel. Some, Smith says, are ready to dive in now, while others will remain wary until that vaccine arrives.
For businesses, particularly restaurants, Smith says they will have to become “innovative, creative” as they learn to cope with the new distancing rules, perhaps relying on outside seating to help spread out diners, to continue to offer and perhaps expand take out services.
Meanwhile, city beaches remain empty, the ocean gently flowing onto places once occupied by tourists and locals alike. Attractions and restaurants remain dark, except for those eateries offering take out. And tourism officials, tour operators, and festival organizers simply wait.
The Impact of COVID-19 on the United States Travel Economy
Oxford Economics published the following 2020 Analysis on April 15th.