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Monday, March 18, 2024

Round table: Travel and tourism, back to work and play

Before most people had heard of COVID, North Carolina was a popular destination for business and leisure travelers. And the numbers proved it: 2019 visitor spending was $26.8 billion, an all-time high. But the travel and tourism industry soon found itself in trouble when COVID was everywhere and most of the world issued stay-at-home orders in the spring of 2020. Almost two years later, the industry is rebounding. Business North Carolina magazine recently brought together six travel and tourism experts and executives to discuss the industry’s recovery since the pandemic’s height, the changes it has to make, the challenges it faces and where it’s headed.

Beaufort Hotel; Explore Asheville; Pinehurst Resort; Visit Greenville, NC; Visit NC; and Visit Winston-Salem sponsored the discussion, which was moderated by Ben Kinney, Business North Carolina publisher. It is edited for brevity and clarity.


How has the travel and tourism industry fared over the past year as the pandemic has waned?

TUTTELL: We recently heard from a reporter who sat in on a Visit Florida state tourism board meeting. Every year the board does independent research to determine its closest competitors. They’re usually places such as California, Las Vegas and the Caribbean. The No. 1 competitor this year was the Carolinas. That’s great news. We have what people
are looking for coming out of the pandemic — mountains, coast, golf and urban regions that don’t feel urban because you can get outside. We have a bit of everything. North Carolina has recovered quickly, probably more so than most states. About a third of the state’s destinations are on record pace and about a third are still hurting, far from where they were. The rest are doing okay.

ISLEY: The pandemic brought a mixed bag. Outfitters and outdoor activities continued to excel over the past year. Indoor cultural venues were challenged, but it was heartening to see live music at outdoor venues thriving again. And while 2020 hotel occupancy dropped to 50%, which is the 2010 level, many people who were willing to travel or could work from anywhere chose vacation rentals. Occupancy-tax revenue for vacation rentals was up 110% for our most recent fiscal year. Hotels were up 5% on the strength of May and June alone. Our hotel partners are rebounding. Vacation rentals continue to climb, which is a win for residents who rent their homes.

GEIGER: People avoided crowded places during the height of the pandemic. We’re an urban center, so COVID crushed us, reducing occupancy-tax collections by about 50%. That’s consistent with recently released statewide numbers, which reported visitor spending was down 47% in 2020 compared to 2019. Business transient is about 60% of our hotel business. The pandemic stopped it. All urban communities were similarly hit. But we’re rebounding. This year’s hotel revenue surpassed 2020’s numbers by the end of August. Corporate-transient business hasn’t returned. Businesses need to get their employees back in the office and traveling. The visitor industry won’t fully recover until were doing business as we have in the past. Convention and meeting business is returning. We were gearing up for a future of hybrid conventions, which mix virtual and in-person offerings. Those aren’t materializing. Many people are tired of teleconferencing. We’re not going to lose business to technology. People want to be with people. Most of the meetings have returned but with fewer people. Sporting events began returning before meetings and conventions, but most of those are outdoors. Our bookings are strong for 2022, 2023 and beyond.

CAUTHEN: We’ve held strong. Golf, which was permitted under stay-at-home orders, was our savior. The hotels were closed for two months last year, but they’ve been busting at the seams since. We’ve been sold out from July through the end of November. We have paused selling our hotels. Cancellations climbed a bit as COVID numbers increased slightly, but they have leveled off. We are selling a lot for 2022. We hope to pass 25,000 social room nights on the books. Our group business is steadily increasing. We’re pickier about the meetings and conventions that we bring to Pinehurst. Since they all stopped last year, we’re able to focus on the most profitable ones.

SCHMIDT: Last year was challenging, but there were glimmers of hope. Outfitters reported that one out of every two people taking trips on the Tar River were from out of town, so we promoted outdoor recreation. Those visitors didn’t add occupancy-tax revenue, but they contributed to sales-tax revenue. Greenville and Pitt County are fortunate; their sales-tax revenue increased from the year prior. This year has been wonderful. The first three months were slow, but things started happening in April. Our sports tourism set a record this year. That’s a strong market for us. We host two or three tournaments each weekend. We had a few conventions and meetings this fall, though we lost some to the spike in COVID Delta variant cases. This summer and fall felt more normal than 2020. East Carolina University home football games have had no restrictions. Our occupancy-tax revenue this year has surpassed 2020. The next two years look strong for conventions and meetings. That gives our hotels hope.

OLIVER: We opened in 2019, perfect timing to walk into 2020. The federal Paycheck Protection Program saved our business last year. This year has been positive. We’re running about 20% over our conservative projections. Our occupancy-tax collections were up 48% for the first eight months of the year. I watch Beaufort’s local sales tax revenue. It was up 34% for the first seven months of the year, so we’re shining here. We’re welcoming business meetings. Almost half of our revenue is from food and beverage, which has been heavily impacted by the labor shortage.

How has the pandemic changed in-person meetings and conventions?

TUTTELL: North Carolina took a measured approach to the pandemic, so people felt they could come here safely. It allowed meetings to happen. There were no large COVID outbreaks that made the news. Visitors and meeting planners avoided places that received negative publicity, such as outbreaks or lack of a response.

Asheville’s downtown skyline

GEIGER: People no longer want to be jammed into meeting rooms or convention floors where it’s standing room only. It’s the same at restaurants and bars. Will you go into a crowded bar, for example, or chose to walk one block further to find one with more elbow room? Social distancing is beginning to happen naturally. Our layouts and floor plans include more space. We have to be conscious of the fact that people want it that way. While the pandemic has changed our ability to hold conventions, people still want them. We have to create an environment that’s safe for consumers because people that attend conferences are consumers. Research shows they also want more outdoor spaces, so we need to find ways to mix them into our meetings, cocktail parties and other events. If we can make those changes as an industry, we can recoup a lot of the business that was lost early in the pandemic.

SCHMIDT: We feel good about the future of conventions and meetings. We’re a drive-to market, which is a tremendous help. It lets people control their environment, making them more comfortable. I’ve attended a few meetings and conventions recently, and people are happy to be with other people. We’re changing our pitches to meeting planners. We still sell venues and amenities, but we’re selling peace of mind, too. Most of us in the industry have created marketing materials that highlight safety protocols over meeting space. Planners are responsible for hundreds or thousands of attendees. And they have to sell those attendees on the destination. If you’re cognizant of each individual’s needs, sell the safety protocols and offer reassurance that they’ll be safe if they come, you’ll accomplish your meeting goals.

How has the pandemic affected smaller gatherings such as weddings and business travel?

ISLEY: The lion’s share of our visitors come for leisure. Weddings, celebrations and sporting events have rebounded well. These are right-sized groups for Asheville and Buncombe County. It’s about the style of meeting. That determines where third-party or in-house meeting planners decide to meet. We recently had an automotive company buy out a hotel for their group over several days. It was more than 100 people here for product exploration and trial, experiencing the wide-open spaces, such as driving the Blue Ridge Parkway.

OLIVER: Nearly 50% of our restaurant space is outside. That helped with the transient and local markets. We also have a lot of indoor space, where we set tables far apart. You almost can see a sense of comfort among people when they enter the space. There’s no way you can do that at a cramped New York City restaurant in a narrow building. We categorize weddings and social events with our meetings business. During the height of the pandemic, we could’ve closed our ballroom without anyone missing it. We’re starting to see bookings, and weddings are leading the way. We have 133 rooms, and all are individually conditioned. That gives guests a level of comfort from a safety standpoint. It’s an advantage beyond industry-wide precautions such as frequent cleaning and fogging.

CAUTHEN: We include our Pinehurst Promise, which details our COVID response on our website, in our emails to meeting planners and other communications. We abide by it, holding true to the protocols in place for the safety of resort guests, members and employees. We try to keep guests as comfortable as possible. We have become creative in our meeting space marketing. We push outdoor spaces, such as the Lake Pavilion and Carolina Hotel’s West Lawn. We also use our large ballrooms, where it’s easy to keep everyone socially distant.

What is tourism’s role in economic development?

GEIGER: Conventions and meetings positively impact the communities that host them. We bring corporate executives to town. It’s often the first exposure business leaders have to a market. It can open the door to a regional sales office, distribution center or business relocation. A company’s vice president or marketing executive comes to town, then they’re back at home talking to the CEO about what a great place they visited. It’s not a coincidence that major markets, such as Orlando and Dallas, have exploded with corporate relocations after a major convention center was built.

TUTTELL: Tourism is the front porch of economic development. We’re often a person’s first impression, whether they are here for a meeting, corporate travel or leisure. When it comes to business relocation, the most important factor is almost always available labor. Tourism-friendly places are where people want to live. That creates a workforce, which every business is competing for today.

ISLEY: We’ve built our reputation as a destination for leisure travel, and that’s been an entryway to companies, such as brewer New Belgium and aircraft engine manufacturer Pratt & Whitney, which is building a factory and bringing up to 800 jobs to the region. We’re doubling down on that. We’ve aligned our proactive group sales team with the efforts of local economic developers to attract business from industries that best suit our region. Those include manufacturing, life sciences, climate and environment, and technology. A test drive is still the best way to sell a car, and that’s what travel and tourism does for our communities. Asheville Regional Airport has bounced back quickly. It was offering 25 nonstop daily flights by June, which was the 2019 level. Allegiant Air is offering service between Key West, Fla, and Asheville, and Jet Blue will start service between Asheville and Boston this coming summer. Those regional connections are important for continued economic growth in western North Carolina and across the state.

How is the industry dealing with the labor shortage amid rising demand?

SCHMIDT: Our job is to bring that 1,000-person convention, sports tournament or what have you. But we need people to service them. Workforce is an issue for everyone who markets a destination. The past few months have been nerve-racking. We had the Little League Softball World Series come in August. We had an influx of people, and you hope there aren’t any hiccups while they are spending 10 days in your city. So, we reached out to our partners, including East Carolina University’s School of Hospitality Leadership. We tapped into it to help fill voids, especially at our lodging and food-and-beverage establishments. I recommend inquiring if your local university or community college has something similar that could help alleviate workforce shortages. We also have to educate high school students about hospitality careers, especially where you can start and where you can end up. North Carolina Travel Industry Association and other tourism groups are doing a good job with this. The labor shortage isn’t going away anytime soon, especially as we get into the holidays. Showing hospitality workers appreciation goes a long way to helping solve it. It’s heartbreaking how some of the industry’s front line workers are treated. The consumer may be frustrated because their meal, check-in or other interaction is taking longer than they want. But they need to understand that these workers are
doing their best. We have people working double shifts. We have people working six or seven days a week. So, be kind to them. It’s an industry challenge not an individual worker’s fault or responsibility.

TUTTELL: ‘Demographic Drought,’ a recent paper by labor-market data provider Emsi, spells out how COVID exacerbated an existing condition. Baby boomers are leaving the workforce, so all industries are struggling to find workers. Tourism will be best served by growing its own workforce. Travel and tourism businesses hire many people just as they’re entering the workforce. NCTIA has done a great job with a Charlotte pilot program, going into schools and encouraging students to choose a career in tourism.

Bailey Park at the center of Innovation Quarter in Winston-Salem

GEIGER: Workers left the industry when the pandemic shut it down. But they aren’t returning for several reasons. They don’t have to work weekends, nights or crazy hours in other industries, which also offer better pay and benefits. Our industry has to discuss how we take care of our people, including pay and benefits. It has to be a holistic approach. It must be a strategic conversation about what’s happening in our communities, North Carolina and nationwide. How do we come out of this with the needed workforce? While changes will affect how businesses operate, we must employ and keep people. Parents are a big hurdle to getting students excited about a hospitality career because they associate it with low wages. If we get parents excited about it, we’ll get more children into the pipeline.

ISLEY: It’s an issue of perception, reality and innovation. On the perception side, jobs in the industry are pegged as low paying. However, U.S. Travel Association’s Made in America report found that nearly four in 10 Americans’ first job was in travel and hospitality. And if you begin your career in hospitality, you end up earning more over your career whether or not you stay in it. Travel and hospitality can be the right job or career right now. When I went to UNC Chapel Hill, I had no idea my job existed. Now there are entire graduate programs dedicated to it. It’s incumbent upon us to tell that story by sharing those personal journeys that happen in each of our communities. There’s an executive chef at one Asheville restaurant who once experienced homelessness. This industry changed his life. The reality part is making connections and giving people rewarding careers that don’t require higher education. There are plenty of general managers of hotel properties who started as a front desk person or bellman. There are more women entrepreneurs in travel and hospitality than any other industry because there are opportunities to grow. We have fewer people currently willing to do those jobs, so business owners are innovating. If you eat at Green Sage Café in Asheville, you order on an iPad. And there is a service charge, so its front and back of house staff can be paid $20 an hour. I hope business owners and industry leaders have a long memory about what we’re dealing with right now, so we can turn a corner on some of these perception and reality issues and make this industry what it is — a people-to-people business. Travel doesn’t occur if a person isn’t motivated or inspired to explore a place or meet people. And it surely doesn’t happen if there’s nobody to deliver the experience on the other end.

CAUTHEN: One of our biggest challenges is attrition — people who decide they don’t want to work weekends or the night shift anymore, and they leave a few weeks later. We’re trying to get creative as an organization: How can we bring people in and entice them to stay? We have offered a sign-on bonus. We’ve done teamwork pay a few times this year. We offer housing for externs and interns. But we also need to take care of current employees. They’re burnt out, they’re busting their tails and they’re wearing many hats. So, we have increased wages. It’s about keeping people happy and bringing in more to help carry the load. It’s a challenge every day.

OLIVER: I’m an old guy, and looking back, I never would have ended up doing what I’m doing by plan. It was stubbornness and luck in my case. Talking to a first time 20- or 22-year-old waitstaff about career possibilities can be an eye-opening experience for both of you. As an industry, we could do so much more with career management and mentoring. Take my daytime job, selling corporate airplanes. I can remember thousands of young people who got a ride in the right seat of an airplane. I didn’t need a copilot, but somebody went because they had the desire. And now they’re a captain at a major airline. It’s getting that first break, that first indication of chasing an interest then mentoring and building a career around it. That leads to a happy and prosperous life.

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