Round Table: Travel and tourism
Travel to and within North Carolina ground to a halt this spring, when the COVID-19 pandemic was met with stay-at-home orders here and abroad. The effects on the state’s tourism industry — which saw a record $25.3 billion in visitor spending in 2018, up 5.6% from the year prior, and employed more than 230,000 people — were swift and severe. Hotels and attractions were empty; restaurants scraped by on takeout orders. But the sun is rising again on this vital part of the state’s economy. Business North Carolina gathered seven experts to talk about the pandemic’s impact on their industry, how they are coping and what the new year will bring.
Business North Carolina Publisher Ben Kinney moderated the discussion.
It was edited for brevity and clarity.
The discussion was sponsored by: Visit North Carolina, Henderson County Tourism Development Authority, Pinehurst Resort, and Convention and Visitors Bureau for the Pinehurst, Southern Pines, Aberdeen Area.
How has the COVID-19 pandemic affected tourism? What has been hit the hardest? What HAS fared better?
TUTTELL: The pandemic is an unprecedented challenge for our industry, one of the state’s largest and a large part of its economy. Tourism essentially stopped at the end of March, when COVID forced people to stop traveling and we had stay-at-home orders. That has never happened. We’ve had events, such as hurricanes, that closed parts of the state before but nothing on this scale. It has cost more than 100,000 jobs and more than $9 billion in visitor spending, which translates to about $300 million in state tax revenue and about $200 million in local tax revenue. Governments will have to make up for that loss in their budgets. Some travel has returned, particularly leisure. But we’ve lost business meetings and travel, conventions and group travel. While some places have seen some leisure travel, that doesn’t make up for other losses. Pandemic restrictions are hurting all businesses. We’re doing everything possible to keep people safely traveling and businesses open. North Carolina’s advantage, which positions it better than most states, is that it has what people currently want — an escape. They can go to the coast or the mountains. Our urban communities are open. They can play golf, which is a perfect way to be active and stay safe. One positive from this year is more people have a better understanding of tourism’s economic importance. When it goes away, everyone, even those not in the industry, is negatively impacted.
HUFHAM: This year has been a mixed bag on the coast. March, April and May totally tanked, like everywhere else. We track occupancy-tax revenue monthly, and it bottomed out during those three months. Summer brought a slight turnaround. Tax revenue for our beaches is
up slightly over last year. Wilmington proper has been affected by the lack of business travel. People want outdoor activities, so they are drawn to the beaches. While our parks, river-boat rides and other outdoor activities had a better summer than we anticipated, our beaches carried the region.
SCHMIDT: We bottomed out in spring and watched leisure travel increase in summer. People stayed home. It hit us hard. We’re a popular destination for sports, conventions and meetings. We’re known for outdoor activities, too. We have miles of biking and walking trails, and the Tar River — popular kayaking water — flows through Greenville. So, we’ve been marketing our outdoor activities to leisure travelers, and it’s working. The outdoor page was the 10th or 11th most visited part of our website in February and March, which may have been partly due to the time of year. But it’s No. 1 now. People are clamoring to get outside and enjoy activities that are easily done socially distant. People are developing outdoor adventure trails with local governments, making a statement that it’s an important part of what we do. Fall was a bit tough because we are a college football destination. Unfortunately, we can’t have 50,000 people tailgating and enjoying football at East Carolina University’s Dowdy-Ficklen Stadium this year. We’re hanging in there, and things are improving each month.
WERZ: It’s no secret that as Pinehurst Resort goes so goes the Home of American Golf. It’s a big part of the region’s success. What really hurt this spring was the resort’s lodging being closed for 59 days, ending May 22, because we received no occupancy tax from it during that time. We were on pace prior to COVID and stay-at-home orders for a record collection of occupancy tax for the 2019-20 fiscal year, and the CVB’s Finance Committee had approved an all-time record budget for the current fiscal year. COVID hit four days later, and we were forced to revise it. We lost about $750,000 in operating budget and about $400,000 in advertising. That’s a big blow. We mitigated last year’s forecasted occupancy tax collections to end the fiscal year on June 30 flat or slightly ahead. We’ve fared better than most golf destinations. Golfers called, asking if local courses — Pinehurst Resort, Pine Needles, Mid Pines and others — were open. They never closed. Golf was our saving grace. We are one of the few CVBs with inhouse video production, so we made a video about playing golf while staying socially distant. It was picked up by national media. We got that message to markets within a comfortable driving distance, basically Atlanta to Washington, D.C. We’re in a rural county. It’s safe — plenty of clean air, far from large population centers and free from the social strife that happens elsewhere. We’re an inviting community that welcomes visitors. Our room-occupancy rate for the first three months of the fiscal year has averaged about 56%, compared to the national average of about 49%. Our occupancy tax was down about 10% in the first three months of the fiscal year; we forecasted it could be off as much as 18%. The community came together. We promoted local: eat at local restaurants, shop local retail, visit agritourism, which is big here along with craft breweries. COVID wasn’t a good thing, obviously, but it brought us together to support tourism. We work closely and talk regularly, which is a plus during the pandemic.
KUESTER: We effectively lost April and May, which is our version of retail’s holiday shopping season. But we still had golf, which is a big deal as the country’s largest golf resort. We’re optimistic about the future. The trends are positive. We see two buckets — the social users and the group market. We had a dramatic drop in group business this year. It’s still soft, but that’s the situation everywhere. Leisure travel has been resilient. Our presales for social business is up about 66% over the year prior, which is encouraging. The corporate business on the books for next year has seen some evaporation in first quarter travel, and gathering bans remain in effect. The binary movement will be the vaccine and how quickly that gets approved and distributed. Landing the United States Golf Association’s second headquarters — Golf House Pinehurst — is an incredible shot in the arm for Pinehurst, the region and state. It will have an incredible impact on visitation for this region and give us a boost starting in 2021. Though finalized later in the year than we had planned, its timing was perfect.
We accomplished something that few destinations could, which was getting a tourism-centric economic development deal done during a pandemic. The USGA is physically linked to our campus, putting us on the same playing field as St. Andrews Links Trust and the R&A in Scotland, the home of golf. It was a group effort. Everybody, from the state to the county to the village of Pinehurst, is providing some level of economic incentives and tax breaks. From a branding standpoint, we’re already incorporating references to “Anchor Site,” which signifies this partnership’s longevity — three decades of U.S. Opens.
CARDEN: We’re a small rural community. Our success during the pandemic started about 10 years ago, after we navigated the Great Recession. I’ve been a chamber of commerce director, so I put that hat on again. We started building infrastructure within our industry, and it has paid off. When I first arrived here, businesses didn’t network. They didn’t know one another. We changed that dynamic. We’ve empowered them. We communicate closely within our industry.
Our occupancy rate was down slightly in June. But our room nights were up by more than 2,000 over last year, which was a record. That was because they were offering discounted rates. I immediately sent out an email, and it has not been that way since. At the end of February, revenue was 15% ahead of last year, which was a 33-year record. We broke even for fiscal year 2020. Much of that was due to reformatting Garden Jubilee, one of our major Memorial Day weekend events. Instead of bringing 200,000 people to downtown Hendersonville, we spread them out by sending them to local nurseries and orchards. That helped those businesses because they had been growing plants for the event all spring. Our hotels have been full since Memorial Day weekend. We kicked off Apple Festival on Labor Day weekend following a similar format. We have an Orchard Trail brochure that sends people to local apple growers. Go back 10 years, and orchards opened Labor Day and closed Nov. 1. Today they embrace agritourism and open in July and close in mid-December. They are bringing in more people who are spending more money. In early July, some of our orchards prayed for a great season. By Labor Day, they were praying for mercy because so many people were visiting. They created an experience where people can pick apples, enjoy hayrides and other activities while staying safe. We help businesses promote CDC mandates and protocols. They all stepped up and have done great.
TAMBELLINI: We’ve done a phenomenal job establishing ourselves as a destination over the last decade. People remember us even when we have paused advertising. Our long-term media relationships are holding us well right now. And we have leaned on our wide-open spaces. We’re seeing improvement from the spring, especially on weekends. In October, our occupancy rate was slightly below pre-pandemic levels. The lack of group travel has hurt midweek business. So destinations are leaning more on leisure travel. Our sales team has been creative, finding new ways to connect with meeting planners. Future events are being added to the docket.
How does tourism complement economic development?
TUTTELL: Pinehurst and Moore County have done a fantastic job of realizing the potential of using tourism to spur economic development. They leverage what attracts people to their region — leisure travel — to bring businesses. If you produce golf equipment, for example, there’s no better place to do it. Where else can you showcase your products on some of the country’s finest courses in the Home of American Golf? We’re going to see more of this statewide in the future.
WERZ: I recently spoke with Christopher Chung, CEO of Raleigh-based Economic Development Partnership of North Carolina. He said tourism is economic development. We work closely with Pat Corso, executive director of economic developer Moore County Partners in Progress, and Linda Parsons, president and CEO of Moore County Chamber of Commerce. Together we are producing a video that will detail the impact of USGA’s Pinehurst headquarters announcement. It will forever change this destination. It most likely will be the biggest tourism impact in our lifetime. And it’s not only about golf. Real estate, health care — our county’s largest employer, tourism is second — restaurants and retail will benefit. Mark Elliott, chef and owner of Elliott’s on Linden in Pinehurst and The Sly Fox in Southern Pines, says between 35% and 40% of his business is tourism based. Tourism is a huge economic engine for Moore County, and the CVB has been appealing to our county leaders to keep it alive and well with the much-needed increase of our occupancy tax to 6%, which is what more than 50 North Carolina counties collect and have been for years, if not decades.
Bringing visitors to your destination is vital to its success. Who have been the targets of your marketing efforts during the pandemic?
TUTTELL: After the pandemic and its stay-at-home orders hit in March, we wanted to understand the mindset of travelers, so we began weekly research. Most are afraid to travel during the pandemic. So we reset our sights and focused our marketing inside the state. We need residents to travel; many are our best customers. We also need them to welcome visitors into their communities. There was a lot of fear around outside visitors. North Carolinians are known for their hospitality. We couldn’t afford to have people take a chance, come here during a pandemic and be turned away or feel like they were an intrusion. Our current targets are residents who want to travel and out-of-state visitors who
live near the state line.
TAMBELLINI: Our marketing has changed quite a bit. We’re inviting people back to our community through public relations and social media. We have tried to strike a balance within our community between bringing back a bunch of people while our community is fighting the pandemic. We developed a methodology to evaluate when to turn on and off our marketing. We also look at the number of new COVID cases within a six-hour drive of Asheville, which is about a 300-mile radius. We exclude those counties that are above a standard deviation, so we aren’t marketing to people in COVID hot spots. In midsummer, as too many counties were being added to the exclusion list, we turned off marketing for a period of time. We continue to monitor that metric.
We’ve used technology to create virtual visits, including 3D views of lodging options and venues, which showcase our destination to meeting planners. We also use drones to give them a complete view of properties, all from the comfort and safety of their tablet, laptop or desktop. The industry will see technology used more in the next year or so, helping us do better jobs positioning ourselves with customers, whether they’re on the leisure or meetings side. We explored its use early this spring, when everything was closed. We launched a virtual Asheville website within a few weeks. Leisure travelers can use it to plan upcoming visits. It will have a long-term positive impact for us.
KUESTER: Leisure travel has led the recovery for Pinehurst and the industry as a whole. We saw 73% of our business mix in the third quarter come from the leisure market, for example, versus 45% the year prior. It was unforeseen to have such demand during a pandemic, but for us it all goes back to golf, which is the perfect sport for these times. I regularly see license plates from Connecticut, New Jersey, Florida and Texas around the village. People feel safe in their car, so they choose to drive here. It might be their one trip of the year, so they are not compromising it.
Raleigh-Durham International Airport is our connection to the world. When flights began to be canceled, we knew we had to tighten our marketing radius. We redefined the drive market from four hours to six hours of driving, which stretches across the Mid-Atlantic and into the Northeast and Southeast. We pulled back from the Midwest and softened our digital marketing advertising. We didn’t lead with a strong call to action. Instead, we put out brand spots such as a video called “Sounds of Pinehurst,” which has generated more than 300,000 views on YouTube. It features B-roll beauty shots without narration. It reminds people of being outside in Pinehurst and what they’ll re-experience when they’re ready to travel again. We’ve seen success with that type of campaign.
SCHMIDT: We have to consider the importance of social distancing during the pandemic. How do we get people outside, where it’s easier to maintain? Establishing our Sports Commission and securing national and our first international event, the Little League Softball World Series, which will be held this coming summer, were big steps. But one market we hadn’t dived into is disc golf. So we threw around the idea of having a disc-golf tournament. We worked with a local committee, and we’ve had three between March and September. Now we’re on the cusp of hosting our first national disc-golf tournament, once we build another course. A Greenville suburb is considering doing just that after seeing the game’s local success, especially from the socially distancing aspect. No one had thought about investing in the sport before the pandemic.
We also have begun promoting local food and beverage. While we’ve had a craft brewery trail, and food and beverage are important components for visitors, we haven’t pushed them. But we’ve started with local residents. They need to be comfortable going out in the community, eating at restaurants and visiting craft breweries, before we ask visitors to do that. We’ve had good success.
HUFHAM: We’re very fortunate in that our location and its climate allow for plenty of outdoor dining options. We’ve been telling locals and visitors to come down and experience our cuisine in a safe socially distant outdoor setting. We’ve pushed that. We also have used different blogs that reach different demographics and generations. Each highlight what appeals to its target group’s members and what they can do outdoors. We pulled back our marketing efforts to contiguous states. We’re doing more digital advertising. It gives us a wider reach, and we can change it on a dime if we need. Our fall campaign reminds people that our weather remains great, and they can still enjoy the outdoors. Remote learning and working have made more time for travel. So we’re marketing to that: Rent a beach house, get away and do your work and lessons from here. You can do both here as well as you can sitting at home, and you have the added benefit of an escape.
WERZ: We’re inviting more social-media influencers and bloggers to visit because you can’t host larger familiarity tours right now. We’re promoting individual media experiences. We don’t have a huge budget, so we have to make every penny count. ESPN Radio Pittsburgh, for example, wanted us to spend significant funds to bring Gerry Dulac’s show here. He works with the Pittsburgh Steelers football team and is a noted golf commentator. He has a huge following in Pittsburgh, which is a great target market for us. They visited this summer and said they’d do it for free, just let them play golf in exchange for the two-hour broadcast. So we set them up, and they did the broadcast, interviewing Pinehurst Resort President Tom Pashley, Pine Needles Lodge and Golf Club President Kelly Miller and other golf and community leaders. They know we’ll come back to them when the economy improves.
Our video-production unit will roll out a weekly segment called Explore Moore on Mondays starting in January. Its, hosts Megan and Jeremy, live in Moore County. Viewers will experience it through their eyes and hopefully want to do what they do. With it airing at the start of the week, viewers will have time to make plans for the weekend. Some of the content will be repurposed for Megan’s social media, including 50,000 Instagram followers and 200,000 Facebook friends, most of whom live outside the region.
CARDEN: I usually do a lot of international advertising, but I refocused it to domestic by late spring. We had visitors from 30 countries last year. That’s shifting.
How are you encouraging people to travel in ways that keep them and your destination’s residents safe?
TUTTELL: We created Count On Me NC — countonmenc.org — a health and safety campaign that encourages travelers and businesses to keep everyone safe from COVID. Most tourism businesses statewide are engaged with it. It asks people to not travel while they’re sick, remain socially distant and wear a mask. We’re asking businesses to pledge safety efforts, too. We offer five courses, including food safety and cleaning. Once a business completes them, it’s placed on a list that visitors can reference. More than 10,000 businesses have done that. We want visitors to be comfortable with traveling and residents comfortable with people visiting. The best way to do that is to make sure that visitors and residents do the proper behaviors to prevent the spread of COVID.
CARDEN: Several years ago, I created my first trail brochure, Cheers Trail. It directed visitors to six beer and hard-cider venues. It’s up to 23 locations as of last year, including Sierra Nevada, whose East Coast operations are in Mills River, as well as Bold Rock Hard Cider, which is the country’s largest hard cider maker. We’re an American viticulture region like California’s Napa Valley. So while everybody was closed, I created Cheers Trail Passport Program. If you visit at least 12 of the 23 — and get your passport stamped at each — you get a gift. People are already redeeming them. It allows people to travel at their pace and comfort such as choosing less busy times. It’s a way to enjoy what we have.
We are blessed to have a variety of things to see, do and experience. We’re a year-round destination with a mild climate. Our location is excellent; most of western North Carolina is within a couple hours drive. We’re focusing on what people can do and feel safe. Those activities are reflected in our national marketing. When the pandemic hit, we already had marketing placed two months out. I always have done a lot of advertising in the Southeast. We recently put up billboards within a five-hour driving distance. We expect a great winter.
TAMBELLINI: We’re fortunate. We have access to a proprietary database that teases out characteristics of different visitor groups, helping us decide who’s most likely to be responsible and adhere to safety guidelines such as wearing masks. We’ve augmented these efforts with signage throughout the community that reminds of the three Ws — wash your hands frequently, wait at least 6 feet apart and wear a mask. We’re making a commitment to bring back visitors, making them feel safe in our community while keeping our residents safe, too.
What are your expectations for the coming year?
SCHMIDT: There’s a lot of optimism. There are three hotel projects being planned or breaking ground in uptown Greenville next year. People are counting on the pandemic easing, whether that’s from a vaccine or a course of treatment that, if you get COVID, will lessen its effects and you’ll be OK. We’re planning for the spring as if we’ll be rolling again, though maybe not as fast as we were last February. As a destination, we have to believe we can’t live like this forever. We must be an aggressive market. All the signs I see point to the community feeling that way. We’re going to be working hard and traveling hard. And we’ve had time to plan in case we need to continue to do things differently.
HUFHAM: Collaborating more has been a silver lining to the pandemic. Many communities have realized that it’s more important than ever to pull together, supporting one another as we enter a new way of doing business. It’s never going to be the same. We must be flexible moving forward. We have to regain our visitors’ confidence. We have to promote that we’re a safe and welcoming destination. Tourism recovery is vital to our region and state.
KUESTER: I do believe that people are suffering from quarantine fatigue and are venturing out because we are social creatures. We’re blessed to live in North Carolina. Our state’s geography is incredibly diverse. I’ve visited the mountains, where my parents have a place in Banner Elk, and I’ve spent time at the coast. Each time that I’ve visited those places this year, I see people enjoying the outdoors. It’s as if we’ve rediscovered the beauty of this great state. As for next year, we’re being cautious with our budgeting and capital planning, deciding how much to spend against next year’s forecast. It’s tricky, and no one wants to be the runaway train with strong predictions. But I do think that we’ve hit bottom in the group-travel market.
Videoconferencing has been a wonderful communication tool, but it cannot replace face-to-face meetings forever. There is a happy medium in the future that we need to reach, and I think we are nearing it. We will continue to put our eggs in the leisure travel basket, because that is where the lowest risk remains in terms of the pandemic. We’ve seen the leisure consumer show resilience. We expect to see a continued flight to quality, less densely populated places. We are well positioned for that given our proximity to Charlotte, the Triangle and the Triad. The big question is when will the corporate market bounce back. We have rolled out a group market campaign called Meet Among the Pines, which invokes a feeling of wide-open spaces, pine canopies and fresh air. The village of Pinehurst was founded as a health retreat in 1895, so in a way we are going back to our roots. I think it will be a year of two stories. The first will be challenging, but we’ll see occupancies progressively improve through the year. I’m optimistic that 2021 will be better for all hospitality owners and operators.
CARDEN: We must continue to do what we can to promote our regions and our local tourism-dependent businesses. For many of them, the more money they made, the more they spent. They weren’t saving for a rainy day. And no one predicted that a pandemic would bring this many consecutive rainy days. Those businesses that did save kept their doors open, marketed themselves in unique ways and found success. We see brighter days ahead. I told my staff when the crisis first hit that tourism will be a leader in the recovery of our economy.
TAMBELLINI: There have been many amazing things happening — innovations and announcements — during the pandemic. Who would have guessed that Asheville would host the Maui Invitational college basketball tournament, which receives national exposure on ESPN. But we are, at the end of November and beginning of December. We have to remain vigilant, certainly in January and February. We’re exploring ways to help our small businesses that rely on visitors. We’ve done a good job bringing in customers to create sustainability for them over the last several years. But as we move into spring, we’re optimistic about inviting people into our communities. More leisure travelers better understand safe traveling. They are returning to air travel. Local governments and businesses within our community are collaborating, creating outside spaces and sidewalk parklets. Those, with the help of a vaccine and other COVID controls, will make people more confident about travel. Certainly, our budget is predicated on seeing that through spring. And that positive trend should continue into 2022.
TUTTELL: We’re counting on more stimulus funds from the federal and state governments. It would bridge the gap to summer, when tourism, hopefully, is cranking again. Thank goodness for what the federal government, the governor’s office and state government already did to help. A big part of the Count On Me NC program is funded by the federal $2.2 trillion CARES Act. We’ve distributed grants to CVBs statewide. We’re ready to attract eager travelers. But other states are hungry for them, too. We must do all we can to market, keep people here and attract others as soon as they can travel. Leisure travel will return, but the status of international and group travel is unknown. The biggest question is business travel. How much will technology, such as video conferencing, change it? If you used to travel 100 days a year, will you only be gone 80 or 60 in the future? Everybody is telling me that they can’t wait to get on the road again, because business works better with in-person interaction. I believe business travel will return, and hopefully that’s as soon as possible. ■