COVID-19 hits city’s tourism revenue

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COVID-19 hits city’s tourism revenue
The staff at Sweet Fire Donna's wearing face masks. Visit Alexandria's annual meeting last week focused on the resilience of the business community. (Photo/Chris Cruz for Visit Alexandria)
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By Missy Schrott | [email protected]

In March 2019, city and tourism leaders were fearful about the impact a three-month Metro shutdown would have on the city’s visitor-driven revenue. Little did they know that a year later, the city’s tourism industry would be hit by an exponentially worse blow.

Financial returns reported last week show that between February and July 2020, the city lost an estimated $12 million in consumption-based taxes due to the COVID-19 pandemic. This data, as well as other COVID-19-impacted statistics, were at the center of Visit Alexandria’s 2020 annual meeting on Sept. 23.

For the first eight months of fiscal year 2020, hotel occupancy percentages were tracking above FY2019. When the pandemic hit, occupancy fell as low as 10%, resulting in a year-end occupancy rate of 55.7%. (Graph/Visit Alexandria)

Typically at annual meetings, the city’s tourism board presents successes from the previous year and outlines plans for the coming year. This year’s meeting was a different story.

“A year ago when we gathered, we were celebrating the incredible accomplishments of those businesses in our community that welcome visitors, show them our hospitality and ensure that they come back and visit again and again and again,” Mayor Justin Wilson said. “This year, we’re recognizing the resilience of those very same businesses and the hard work of Visit Alexandria and others to support them.”

Patricia Washington, president and chief executive officer of Visit Alexandria, presented data findings detailing how the city’s tourism industry has been impacted since mid-March and what to expect in the future.

For the first eight months of fiscal year 2020 – which ran from July 1, 2019 to June 30, 2020 – hotel occupancy percentages were tracking above where they were in FY2019, even during the summer of 2019 when the Metro was shut down. As of February, city hotels were on track to end FY2020 with a year-end occupancy of 77.1%, Washington said. It would have been the sixth consecutive fiscal year with hotel occupancy percentages in the 70s.

 

The impact of COVID-19 on various business sectors in the early weeks of the pandemic. (Graph/Visit Alexandria)

Then in March, “the bottom dropped out,” Washington said. Occupancy fell to as low as 10% in April, and the last four months of FY2020 resulted in an actual yearend occupancy rate of 55.7%.

Visit Alexandria commissioned a study with STR, a national firm that monitors the hotel sector, to project when occupancy might bounce back. STR predicts that by the end of calendar year 2020, hotel occupancy will fall to 36% and then begin recovering to a projected 58% by the end of calendar year 2021.

Beyond hotels, other sectors in the hospitality industry, including restaurants and retail, have been among the hardest hit by the pandemic, Washington said.

Back in January, at Visit Alexandria’s annual “What’s new” meeting, leaders from the tourism board detailed new and exciting attractions coming to the city in 2020, from expanded Black history programming to a slew of new businesses planning to open. The organization had big plans to draw visitors to the region and promote all of the city’s offerings.

When the pandemic hit in March, Visit Alexandria was required to change its approach.

“[On March 16,] we launched ‘ALX at Home,’ a complete strategy shift to promote safe activities and to help area residents support local independent businesses,” Washington said. “When we put out the call to [businesses] for curbside and at home-friendly content, [they] responded quickly and over the ensuing weeks, we kept building that content.”

In the early days of the pandemic, Visit Alexandria helped promote restaurants that had shifted to carry out and delivery formats, fitness studios offering virtual classes and boutiques opening online stores. The organization also helped rework two major annual events to be COVID19-safe: Restaurant Week To-Go and the Alexandria Summer Sidewalk Sale.

Now that the region is about six months into the pandemic and people are more willing to spend time in safe public settings, Visit Alexandria is shifting its focus back toward drawing visitors to the city, Washington said.

Studies from Destination Analysts, a travel and tourism market research firm, show that while COVID-19-related health concerns have not changed dramatically since March, people are becoming more comfortable with the idea of traveling.

“Travel confidence … rose in early June as infection rates declined, with half of the public indicating readiness to travel again,” Washington said. 

The research indicates that people who are willing to travel are more likely to go somewhere familiar and somewhere within driving distance. Going forward, Visit Alexandria plans to target regional visitors who live within three hours driving distance of Alexandria.

For the rest of the year and into 2021, city tourism will likely be down from previous years, but Visit Alexandria plans to continue promoting virtual offerings and COVID-19-safe, in-person attractions. Holiday celebrations will likely be virtual, and winter restaurant week will likely repeat the format of summer restaurant week to-go, Washington said.

While the city’s visitation has taken a blow because of COVID-19, the pandemic has resulted in some new attractions.

One major new attraction is the pedestrian zone with expanded outdoor seating in the 100-block of King Street, a change City Manager Mark Jinks said will likely be made permanent.

“One silver lining in the pandemic response was the establishment of a ‘streetery’ on the 100 block of King Street,” Washington said. “Long considered, this pedestrian-friendly redesign sprang to life as a pilot test under the agency of the city business reopening team. It was a hit from the start and has become a new hub of energy on King Street.”

In addition, Visit Alexandria has been marketing “micro-weddings,” smaller celebrations that can be hosted at some of the city’s boutique venues. The organization is also working with local hotels to promote hybrid meeting spaces, which would allow for a blend of remote and on-site participants.

The overall message Visit Alexandria is promoting in the era of COVID-19 is that Alexandria is a close getaway with historic character, value, safety and flexibility, Washington said.

“Travel is more than just revenues, jobs and tax receipts,” Washington said. “If the past six months have taught us anything, it is how much we need to see other places and cultures, how much we need to reconnect with each other and our values and how much we simply need to breathe and recharge our batteries. That’s why what [businesses] do matters most and why we should fight so hard to recover.”

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