Home » COVID-19 Disrupts Tourism Industry

COVID-19 Disrupts Tourism Industry

CVBs play a vital role in economic development of Kentucky communities

By Lorie Hailey and Shannon Clinton

Keeneland canceled its spring sales meeting and spring race meet to help promote social distancing during the coronavirus pandemic.

Spring in Kentucky is a sports-lover’s dream with back-to-back action: March Madness, the Keeneland spring racing meet, and the Kentucky Derby, the oldest continuously running sports event in the nation. Tourism, the state’s third largest industry, breaks from the gate in the spring.

But those big events and many, many more are canceled or postponed this year as the world hunkers down to help slow the spread of COVID-19, an especially contagious virus that causes respiratory complications and death at much higher death rates than typical seasonal illness. As of late March, when The Lane Report went to press, confirmed cases and deaths continued to rise despite closures of schools, workplaces and public gatherings.

“Social distancing” measures to prevent the spread of the illness have changed life and brought swaths of the economy to a screeching halt. All sectors of Kentucky’s economy are affected, and tourism, a social activity, is one of the hardest hit. All event information on the state tourism department’s clearinghouse website, Kentuckytourism.com, was “removed to promote social distancing,” the site explains.

“We realize that this is much more than a tourism issue; it is a public health issue,” said Kentucky Tourism Commissioner Michael Mangeot in a March 13 email to the state’s tourism industry partners. “ … This situation will be disruptive and we need to prepare ourselves for some difficult months ahead.”

“We have already seen a major impact on our industry with the closing of attractions and the cancellations of meetings, conventions, events and leisure travel,” he added.

Tourism provides 94,583 jobs with labor income of $2.94 billion, $11.24 billion in visitor spending and other quality-of-life enhancements. In 2018, the most recent figures available, 71.6 million people took trips to and within Kentucky, spending nearly $7.6 billion, according to Kentucky Department of Tourism data.

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Statewide, tourism provides more than $787 million in state and local taxes annually, Kentucky Department of Tourism figures show. And overall, tourism creates a $14.5 billion economic impact in Kentucky, according to an economic analysis by CERTEC.

Nancy Turner, president of the Kentucky Association of Convention and Visitors Bureaus (KACVB) and executive director of the Winchester-Clark County Tourism Commission, said tourism officials are already feeling the repercussions of social distancing protocol and fear of the virus’ spread.

“It will likely get worse before it gets better,” she said in mid-March. “The sooner this situation is resolved, the faster our industry will recover. Multiple conferences, tours, events and room nights in general are being canceled. This doesn’t just impact the venues, attractions, restaurants and hotels, but the overall host community.”

The pandemic has completely disrupted the travel and tourism industry at every level in Lexington, and across the state, the nation and world, said Mary Quinn Ramer, president of VisitLex, the city’s convention and visitors bureau.

“Given that we are in the midst of a rapidly evolving situation, our present concerns are the thousands of Kentuckians in our industry who face extended losses of wages and benefits during this critical time,” she said. “Right now, we are focused on the immediate needs of our partners.”

Predicting when the tourism industry will begin to recover is complete guesswork due to unknown factors – how long the virus will linger and how long it will take for some new normalcy to return, among others.

“We project the travel industry to enter a protracted recession based on the expected downturn in travel alone,” a mid-March Oxford Economics analysis said. “The recession is likely to last at least three quarters with the lowest point in the second quarter of 2020.”

Coordinating with its Tourism Economics subsidiary company, Oxford modeled the expected downturns in the U.S. travel industry in 2020 as a result of COVID-19. The analysis predicted a travel industry decline of 31% for the entire year, including a 75% drop in revenue over the next two months and continued losses over the rest of year reaching $355 billion. The decline in travel spending will translate into a total economic loss of $809 billion in economic output, the report said.

Mangeot said he thinks the pandemic will have as much of an impact on tourism as the Sept. 11, 2001 terrorist attacks. Possibly greater.

“Both the U.S. Travel Association and Destinations International believe our recovery period will take anywhere from 24 to 36 months,” Mangeot said. (Destinations International is a professional organization representing convention and visitors bureaus worldwide.)

No matter how long recovery takes, Louisville Tourism officials say interest in traveling to the Derby City will return, and they will be ready.

“As evidenced by Louisville’s growth, strong hotel demand and record attendance at several attractions last year, Louisville Tourism feels confident that the demand for Louisville as a destination for meetings and leisure travel was high before the disruption, so we believe that interest will return when this passes,” said Karen Williams, CEO of Louisville Tourism.

Tourism aids economic development

The coronavirus-induced decline in leisure travel will not only affect those employed by the tourism industry. Economic development is distinctly tied to tourism.

KAVCB’s Turner likes to say that if economic development is a resume for a community, “then tourism writes the cover letter.”

In Winchester-Clark County, where consuming beer cheese and Ale-8-One soft drinks figure prominently in the visitor experience, “We provide jobs for over 400 people within the tourism industry – and the most recent figures were from 2018 – and we brought in over $57 million,” Turner said. “That’s huge money that’s coming into our community and it’s new money, so it’s starting its circulation for the first time, unlike some other industries that create economic impact.”

If the economic impact of tourism was absent, Turner said, local residents would collectively have to supply more than $4 million in additional state and local taxes each year.

A strong visitor economy can also help other areas of the economy flourish, said Eric Summe, president/CEO of Kentucky’s only multicounty tourism bureau, Northern Kentucky CVB (MeetNKY), which is based in Covington and represents Boone, Campbell and Kenton counties.

“Because of the way the job market works for talent attraction and workforce development, people today –  particularly younger folks – won’t go just anywhere,” Summe said. “They have to understand what a sense of place entails” and whether they want to live and raise a family in a certain community.

Though it is part of Kentucky, this northern tip of the commonwealth is also part of the Greater Cincinnati metro area and benefits from the proximity when tourists plan their trips, he said. Among MeetNKY’s three counties, in 2018 there was $1.88 billion in visitor spending, nearly 17% of the total $11.24 billion spent in all Kentucky counties that year. The tourism industry here employs more than 13,000 as well, and provides about $95 million in state and local taxes.

In Bullitt County, Troy Beam is executive director of the Shepherdsville-Bullitt County Tourist and Convention Commission, where revenues stem from a room tax on more than 1,000 hotel rooms and a restaurant tax helps fund the local convention center. Visitors come here to visit nearby Bernheim Arboretum and Research Forest and pursue bourbon and winery experiences.

“Tourism commissions could easily exchange names to be economic impact commissions because that’s what we do,” Beam said. “We don’t have smokestacks and forklifts, but we do have visitors coming in and spending outside money and they don’t have to have (new) sewers, sidewalks, things we already have there. They’re bringing in money from the outside and leaving it with our hotels, restaurants, attractions and moving on down the road.”

He estimates locals would be taxed an additional $456 more per year apiece if not for the tourism industry. To ensure that his destination marketing messages are getting through, hotel guests are surveyed to learn where they heard about visiting the area, Beam added.

With organizations and businesses looking for from 700 to 10,000 s.f. of meeting space, his marketing efforts focus on cities like Cincinnati, Dayton, Columbus, Indianapolis, Chicago, St. Louis, Birmingham, Nashville and Atlanta and extend even into Canada at times. Brochures are distributed predominantly along the I-65 corridor, with digital marketing, billboards and Google ads rounding out his strategy.

CVBs important to community economies

Somerset-Pulaski County CVB/Lake Cumberland Tourism Executive Director Michelle Allen is excited about a new local distillery, Horse Soldier Bourbon, that will give tourists another destination in a couple of years. It’s a $50 million project expected to add about 56 direct jobs in the community.

Tourism provides $119 million in economic impact locally, Allen said, with the popular Lake Cumberland attraction benefitting marinas, hotels, restaurants, gas stations and businesses.

It’s ideal when local officials realize the importance of tourism and are supportive of tourism commissions’ work, she said.

“We’ve got a great judge-executive and an awesome mayor that believe in tourism so my job becomes easier when you have people who believe in what you’re doing as well,” Allen said.

In Paducah, Mary Hammond is the executive director of the Paducah Convention and Visitors Bureau, where quilting enthusiasts flock year-round. Cultural tourism is big in Paducah, as it is in many other places where visitors want unique, authentic experiences, she said.

In 2019, Paducah’s National Quilt Museum welcomed visitors from 34 countries and all 50 states, Hammond said, and though Paducah can’t compete with the offerings of a big city, it is attractive for visitors who want ease and walkability in their destination city, with great cultural attractions and activities.

Because the area is popular with hunters, Paducah has landed the National Retriever Championship, and the city has also hosted the Disabled Water Ski Championship.

“We look for the niche market, which has really been good for us,” Hammond said.

In Madisonville, Tricia Noel is executive director of the Hopkins County Tourist and Convention Commission. She said her office targets visitors within a four- to five-hour drive to come enjoy outdoor recreation and special events.

To gauge return on investment, Noel said, visitor surveys are conducted when possible, particularly after sporting events, to gather visitor information and analytics for future use.

The same events, restaurants, shopping and attractions that visitors enjoy also benefit locals, she said.

Infusing new, outside dollars

“Tourism is an economic driver for any community,” Noel said. “Our mission is to attract visitors to our community, which in turn infuses new money into our economy. Strong tourism efforts and tourism projects provide an even better quality of life for the local citizens.”

Large metro areas in Kentucky like Louisville and Lexington have more restaurants, hotels and attractions in their hospitality sectors than smaller communities, so their employment and economic figures loom large when it comes to tourism.

Last year in Fayette County, VisitLEX’s Ramer said, the hospitality industry provided about 12% of overall employment. The economic impact of tourism countywide in 2018 was $1.3 billion, with transient room tax revenue growing in 2019 to exceed $16.6 million. Those funds are reinvested in the community.

“There’s just been tremendous growth in the hospitality industry, particularly over the last decade, and that’s been fantastic,” Ramer said.

In Fayette County, there now are 18 craft breweries on a Brewgrass Trail for visitors to enjoy and 15 bourbon distilleries within 45 miles of downtown Lexington, Ramer said.

Louisville Tourism’s Williams said visitors flock to the city’s 10 bourbon experiences downtown, the Muhammad Ali Center, Louisville Slugger Museum, Churchill Downs, great hotels and culinary experiences, and a multitude of parks and special events, with 16.4 million visitors annually. Louisville Tourism reports show that the estimated economic impact to the area for last year’s Kentucky Derby and Oaks alone was $394.4 million. (This year’s Derby has been rescheduled from May 2 to Sept. 5 in response to COVID-19. The Oaks will be held Sept. 4.)

A visitors’ profile study was conducted in 2015 and another is planned soon as 5,000 hotel rooms have been added since that prior study, Williams said. Profile study data will reveal where visitors are coming from and help fine-tune marketing efforts, making sure they’re targeting the right cities, trade shows and print and digital publications to generate visits.

A 25-member client advisory board comprised of business professionals meets quarterly to share with local officials what’s important to them in their various trade show experiences, including everything from airports to attractions and safety and helping Louisville Tourism keep up with trends and marketing. The board’s feedback is shared with elected leaders and figures prominently in strategic planning.

“You can’t just talk the talk, you have to walk the walk and you have to really hear what they’re saying and be open to change,” Williams said. “I think we’re in a really good place in that way.”

Apps gather valuable visitor data

Marketing strategies and outreach are increasingly high tech in today’s tourism industry. A service called Arrivalist provides important visitor data gleaned from cell phones. When visitors come for conventions, festivals or other events, the company tracks and shares where people visit, how long they stay and even their travel patterns when visiting other cities.

“It’s a really new data platform that’s only been around for about three years,” Williams said.

Louisville Tourism also participates in pop-up events for social media influencers in Chicago, Nashville and other areas, and solicits their feedback. Williams said industry research now is such that if you can pay for it, it’s available to use.

But even with all the new technologies, paper brochures and visitors’ guides still exist, though mobile apps are increasingly prevalent as people want to purchase tickets and book hotels online, view restaurant information and walking or driving routes.

And good old face-to-face communication remains important, as Louisville Tourism reps attend major trade shows and have a physical presence in Atlanta, Washington D.C., Chicago and New York, working with Louisville staff on business outreach.

Ramer said RecommendLEX enlists the help of Hometown Hosts who belong to groups and associations that may want to book an event in the area, marketing the area with a genuine willingness to show off their city to fellow group members.

As for return on investment, she said there’s a continuous effort to optimize dollars spent, poring over industry metrics and looking at local hotel performance and tourism website traffic data, as well as results of seasonal marketing campaigns.

Every interaction is an opportunity

Specific strategies focus on each stage of the travel cycle, from being inspired to visit, through booking a trip, visiting and hopefully sharing the experience with others, Ramer said. Meanwhile, the visitors’ center is also important to welcome visitors and engage more locals to visit local attractions and events.

Designated staff members work with meeting planners to answer questions and accommodate their needs, with responsibility for different market segments, Ramer said.

“I think locals are always surprised at the diversity of things happening in and around the city,” she said.

In Northern Kentucky, Summe said platforms are available to purchase that include referral systems for meeting and events planners, so his sales staff can prospect lists of planners looking for certain convention space, local attractions and amenities and make contact. Other meetings are booked via repeat business or word of mouth, he said.

Content marketing and web managers at his office use social media to help lure visitors, putting exciting information laden with colorful videos and photos on Pinterest, Instagram and Twitter.

“Those are becoming more and more important,” he said.

High-tech software at Summe’s office also provides estimated economic impact figures for certain events.

For example, Turner said geofencing allows participating tourism officials to target a festival in another state that’s similar in theme, size and type of community and actually market to their visitors to come to their communities. In addition, the technology lets tourism officials know if they actually visit.

“With digital marketing and all the statistics that social media provides, you can almost find your lookalike visitor, see how they’re responding to your ads and see if they’re actually coming to your community,” she said.

Even with all the technology at their fingertips, tourism directors statewide personally put in the effort to be enthusiastic ambassadors for the communities they serve, Turner said.

“I don’t know of a single tourism director that is not passionate about their community and loves to sell it,” she said. “That works not only for the tourist but it also kind of creates that collaborative spirit within the community and hopefully validates what we do to our elected officials, not only on a local level but on a state level.”

Lorie Hailey ([email protected]) is special publications editor and Shannon Clinton ([email protected]is a correspondent for The Lane Report.