Facing canceled events, closed venues, mounting revenue losses and growing layoffs, Alabama’s tourism and travel industry is digging in for what could become an extended battle with the coronavirus pandemic.
As in every segment of global society, the state’s hospitality industry is struggling with the uncertainties of how severely and how long the crisis will affect everyday life.
The stakes are obvious in a state that depends on the travel and tourism for 7.3 percent of its gross domestic product. The industry brought $15.5 billion to Alabama in 2018 and created an estimated 198,891 direct jobs, according to the Alabama Tourism Department’s latest annual report. Taxes paid by tourists saved each Alabama family $507.
The largest financial hit came March 19 when Gov. Kay Ivey closed beaches on the Gulf Coast just as spring breaks were underway. State tourism Director Lee Sentell said the Gulf Shores and Orange Beach area make up about 30 percent of travel revenue in the state.
The disruption, however, is not limited to the beach. Hotels, restaurants, entertainment venues and general retail businesses across the state are scrambling to dial back expenses.
“The spread of COVID-19 has initiated a period of unprecedented uncertainty in our industry,” according to a statement from the Birmingham-Jefferson Conference Complex. “The health and safety of BJCC clients, guests, visitors and employees continues to be a top priority.”
The BJCC has canceled or postponed about 15 events so far, including R&B Rewind, Celtic Woman and “The Price is Right.” That leaves 23,274 seats empty at the arena, concert hall and two theaters.
“We are evaluating the impact,” said Christina Frantom, director of marketing and communications. “We are gathering information for our leadership. We are working to determine the effects.”
She said all nonessential BJCC employees are working from home.
Meanwhile, the BJCC is meeting with planners, artists, tour managers and promoters, and leaving event cancelations up to event organizers. Information about refunds and scheduling is available at bjcc.org.
The situation is much the same at other venues, including Von Braun Center in Huntsville. The center has canceled, postponed or rescheduled about 40 events so far.
Steve Miller, general manager of the Birmingham Sheraton and Westin hotels adjacent to the BJCC, said his occupancy rate dropped to 30%. That compares to a normal range of 65% to 70% this time of year.
“It’s good news no one has lost their jobs, but we do have furloughs and temporary lost jobs,” Miller said of the 400 employees. “It depends on the department they’re in.”
Many of the furloughs have hit the hotels’ restaurants, whose dining rooms are closed. The hotels temporarily consolidated their food business, and limited it to take-out and room service for the immediate future.
Restaurants Taking Big Hit
Nationally, a report from OpenTable showed on-premise dining was down 92 percent on March 19 as restaurants closed or restricted dining and more people stayed home.
Miller stressed the Sheraton and Westin have not reduced cleaning and sanitizing operations
The hotels are part of Marriott International, which has a major presence in Alabama, including resort partnerships with Retirement Systems of Alabama.
Internationally, Marriott officials are placing tens of thousands of employees on furlough because of the coronavirus.
Miller said he is receiving updates from the corporation. At this point, officials expect the downturn to be sharp in the second quarter of 2020 — April, May and June — with a small improvement in the third quarter and operations returning to normal in the fourth quarter.
But these projections come with a dose of uncertainty.
“As travel restrictions and social distancing efforts around the world become more widespread, we are experiencing significant drops in demand at properties globally with an uncertain duration,” Marriott said in a statement.
SEC Baseball Tournament, PGA Event, Fishing Competition Affected
The pandemic is also wiping out tourism revenues for spring sports, including the Southeastern Conference Baseball Tournament, which has been played the past 22 years at Hoover Metropolitan Complex. Last year, 162,699 fans attended the games. The tournament has an estimated $15 million economic impact on the Birmingham area.
Mayor Frank Brocato said he expected the cancelation, but it was still difficult to hear when SEC officials announced the decision.
“We certainly anticipated this call from Commissioner (Greg) Stankey and we know it is a decision he did not make lightly, but with great consideration, input and obviously considering the national emergency we all are facing,” Brocato said. “We look forward to the return of the tournament next year.”
The Professional Golf Association Tour rescheduled the Regions Tradition tournament at Greystone Golf and Country Club in Hoover to Sept. 23-27. The tournament originally was scheduled for May 6-10.
In addition to athletic event cancelations, Sentell said organizers canceled fishing tournaments across the state in March.
Sentell said he doesn’t know how much revenue and jobs the pandemic will cost in Alabama. He plans to discuss the situation with regional tourism directors in the coming weeks, and seek their input on the financial impact.
Travel Industry Appeals for Federal Help
As the industry continues to plan for lean months ahead, Sentell said leaders in the tourism industry met March 17 with President Trump to appeal for financial help. They discussed a disaster relief package to help the millions of travel workers and businesses.
Decreased travel due to the coronavirus will inflict an $809 billion hit on the U.S. economy and eliminate 4.6 million travel-related American jobs this year, according to an analysis by the U.S. Travel Association. The worst period will be the next six weeks, the study states.
“There are countless stories of travel businesses — 83 percent of which are small businesses — working hard to do right by their workers,” said U.S. Travel Association President and CEO Roger Dow. “But the cold reality is they can’t support their employees if they don’t have any customers, and they don’t have any customers because of the actions needed to halt the spread of coronavirus. Millions of Americans shouldn’t have to lose their jobs by acting in the interest of public health.
“We’re witnessing the shutdown of travel. The economic effects of that are already disastrous, but could become worse and permanent unless the government acts now.”
Federal guidance initially urged Americans to avoid gatherings of more than 10 people for the next two weeks, work and attend school from home if possible, and abstain from eating or drinking out. But as the world learns more about the pandemic, the situation and guidelines continue to change.
An internal report from the Department of Health and Human Services obtained by The New York Times predicts the “pandemic will last 18 months or longer and could include multiple waves of illness.”
The evolution of the pandemic’s effects in Alabama was evident on March 19 along the Gulf Coast. Early in the day, spring-break crowds populated the beaches. A survey of 20 beach-area restaurants showed 18 still had their dining rooms operating. Only one of the surveyed restaurants had limited service to take-out.
By day’s end, however, Ivey had closed the beaches and banned on-premise consumption of food or drink.