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Featured Story: Summer Travel Expected to Warm Up

After a ‘brutal’ 2020, Kentucky tourism sector sees pent-up demand driving the early stages of recovery

By Greg Paeth

By every measure, 2019 was a record-setter for Kentucky travel and tourism as some 74 million visitors spent nearly $8 billion, creating overall business sales of about $11.8 billion and driving home the point that the industry is one of the state’s leading revenue producers.

The good times continued until March 2020, when the COVID-19 pandemic resulted in shutdowns that hammered the sector around the globe.

Kentucky continues to grapple with a pandemic that as of March 2021 had claimed nearly 5,000 lives; wiped out—at least temporarily—an estimated 40,000 travel-related jobs; and shut down hundreds of businesses throughout the commonwealth.

As spring 2021 approached, tourism and travel executives from around the state offered their perspectives on the last year and unveiled a coordinated strategy to rebuild an industry that ranks in Kentucky’s top five for economic impact. They universally predict this year will be better than 2020, if they maintain focus on their goals.

“We can’t let down our vigilance about health and safety,” said Hank Phillips, president/CEO of the 900-member Kentucky Travel Industry Association (KTIA), which in February unveiled a 40-point recommendation plan, Recovery Actions For Tourism (RAFT).

Two common threads were woven through industry executives’ comments: Every indicator in late 2019 predicted travel and tourism in 2020 would have smashed 2019’s records. And every indicator for this year brims with cautious optimism about restoring the industry, although it may take at least two years.

That trepidation reflects many factors, including the possibility that COVID numbers could spike again, prompting another set of business restrictions.

“Their (state tourism) numbers for 2020 haven’t come out yet, but obviously they’re going to be a fraction of the numbers for 2019,” Phillips said. “Last year for this industry was devastating. That’s the word we use to describe it—at least that’s the word that we can put into print.”

“I think it’s safe to say our industry has been one of the hardest hit nationally by COVID, because our job is to bring people together and you really can’t do that right now,” said Mike Mangeot, commissioner of the Kentucky Tourism Department.

And yes, without COVID, 2020 was on pace to shatter 2019’s records, he said.

Mangeot and other industry insiders agree that many of this year’s travelers are likely to be Kentuckians and residents of nearby states who take short trips to “test the travel waters.”

“People want to travel and ‘road trips’ are key for the next 12 to 18 months. And we’ve got a great location for these,” said Mangeot, noting that Kentucky is within a day’s drive of two-thirds of the U.S. population.
Mary Quinn Ramer, president of VisitLEX, the travel and tourism agency for Lexington and Fayette County, shared the view of 2020.

“We, as you might imagine, had a devastating year last year. What we experienced in Lexington was very similar to what was happening across the country, and we had record lows across the board,” Ramer said. “But obviously, what we do in the hospitality space was totally incongruent with what needed to be done for the safety and health of folks during the global pandemic, so it’s no surprise that our industry was so drastically devastated. In terms of the national impact, it was like 9/11 and the recession (of 2008-2009) times 10.”

It makes for a steep climb back.

“We don’t think you can automatically flip a switch back on …we know that 100% of our hospitality partners lost income due to the pandemic,” Ramer said, adding that three-fourths of the 12,000 in Fayette County who work in the industry lost jobs last year.

In 2019, travel and tourism were worth more than $1.3 billion to Fayette County.

Job loss also was a painful topic for Stacy Roof, president and executive director of the Louisville-based Kentucky Restaurant Association, whose 1,200 members represent about 7,700 restaurant locations in the state.
The industry was cruising along in 2019, Roof said, with record numbers of about $9.2 billion and even better results expected for 2020. Then things crashed.

“We lost about $550 million in sales last April and 114,000 of our more than 200,000 employees were laid off,” she said. “We don’t predict that most operators will be profitable for a year or two. They’ve got such a large hole to dig to out of.”

Roof pointed out that since the pandemic emerged, restaurants were impacted by every COVID-related regulation that was announced. Roof said with the industry taking such a hard hit, the association didn’t send out invoices for annual dues or drop any members during the crisis.

“We felt it would be rude to send them one more bill that they couldn’t pay,” Roof said.

She did, however, express optimism for the future, noting that as the weather warms “things should be picking up.”

Confidence in travel is key
Some debate continues across Kentucky about wearing masks, social distancing, getting vaccinated and whether restaurants and bars should get a green light for full operations. But those are non-issues inside the industry.
“The biggest part of our job is rebuilding consumer confidence in travel,” Mangeot said. “Even with vaccine distribution and everything else, I think we need to be especially vigilant right now and make sure we’re wearing our masks and taking all the safety precautions. This is a way to encourage travel in the state.”

Phillips concurs.

“With the consumer, traveler confidence will be a major asset of the industry’s recovery—feeling safe, feeling they can travel and stay healthy. And certainly, the primary determinate of that will be the speed and extent to which the vaccinations occur. And that’s looking good and getting better. That’s important to traveler confidence,” Phillips said.

Mangeot, Phillips and other travel and tourism executives all predict this year will be better than last.

“Everyone was doing well even in fiscal year ’20 until the pandemic hit,” Mangeot said. “We were on track to better 2019 by a pretty good margin when COVID hit and for our revenue numbers we took a pretty substantial hit in the last quarter of the fiscal year,” Mangeot said.

The commissioner hosted a webinar for travel and tourism insiders in early March that outlined a marketing strategy for the year: “Stay Close. Go Far. Travel Safe.”
“Stay Close” encourages Kentuckians and residents of nearby states to take short trips in the commonwealth. “Go Far” suggests delving more deeply into “your own backyard—all the hidden gems that are around you,” a spokesperson for the department said.

Majority say they want to travel
Mary Hammond, executive director of the Paducah Convention and Visitors Bureau, where visitors spent nearly $190 million in 2019, is among those who expect more people to “Stay Close” in smaller cities like hers.

“Among the groups that are getting vaccinated, you can tell that they are more comfortable getting out,” said Hammond. “We’re down 15% versus last February and last February was a good February. It’s been a very hard 51 weeks, but we hung in there. People have been creative.”

Although it didn’t necessarily impact lodging numbers for February, the region received some flattering attention from Travel and Leisure magazine, which selected Paducah—alongside the Caribbean destination of Aruba and Florida’s Atlantic Coast—as one of the top 10 places to visit in February.

“Small towns have special appeal this year, and this town of just 25,000 offers both quaint atmosphere and big city amenities,” the magazine said in its recommendation. The city’s National Quilt Museum received attention as well as a historic downtown that “features various examples of vintage architectural styles as well as working artists’ studios, galleries and public art. Visitors can tour the area on foot, bike or horse-drawn carriage, and they may want to add a brewery, distillery, winery or barbecue restaurant to their itinerary for some local flavor.”

“That shows me,” Hammond said, “that people are interested in those smaller destinations. That they are interested in going where people can get out of their car and feel safe and where it’s walkable.

She is among those optimistic about 2021, but on a slow, rolling basis.

“It’s going to be fall before we see big numbers as compared to last year,” she said. “But I do on a daily basis see small numbers increasing. It’s still a time of counting your pennies because it’s not going to happen all at once.”

A recent survey of 1,000 people done by a research firm found 81% of respondents planned to travel in the next six months, Mangeot said, noting that this “ready to travel” number had been hovering around 60% a short time ago.

“I feel better every day that good things are coming,” Julie Kirkpatrick said after Ohio Gov. Mike DeWine announced the Cincinnati Reds could open their baseball season on April 1 at 30% capacity of Great American Ball Park, or about 12,700 of the 42,319 seats.

“There’s a lot of information about pent-up demand, and the No. 1 priority is to see family and friends,” said Kirkpatrick, who recently took over as president and CEO of meetNKY, the Covington-based convention and visitors bureau for Boone, Campbell and Kenton counties in Northern Kentucky. Her office is directly across the Ohio River from Cincinnati and the popular baseball stadium.

Like other tourist executives, Kirkpatrick was ecstatic about her 2019 numbers. They were “the top of the market for sure in terms of revenue, occupancy and openings for restaurants and bars and experiences,” she said, adding that Northern Kentucky Convention Center attendance also peaked that year.

2019 boom became brutal 2020
The impact of COVID-19 was brutal, though. Hotel occupancy in Northern Kentucky dropped from an average 73% in 2019 to 46% in 2020, and lodging revenues plummeted from $204 million to $108 million, with room rates falling 18% for the 7,500 hotel rooms in the three-county market, Kirkpatrick said. From 2019 to 2020, Northern Kentucky Convention Center attendance dwindled from 136,000 to 18,000.

Kirkpatrick and several other industry insiders also pointed out that leisure/tourism travel and business/convention travel are distinctly different and won’t bounce back in unison.

Kirkpatrick predicted that Northern Kentucky will recover about half the business it lost last year and acknowledges that she’s uneasy about “big event travel”—conventions, conferences, concerts and festivals, for example.
She is not alone with that concern.

“Everybody has been hurt badly, but the hotels and the communities that have been hurt the worst are those that are dependent on meeting and convention business—those downtown hotels cater to that market,” the KTIA’s Phillips said. “There’s concern that (meeting and conventions recovery) will be slower than the leisure part because employers may be more reluctant to put employees back on the road. People might continue to get together virtually.”

Much rides on successful management of COVID infection rates back toward normal.

“If there are no negative surprises, I think by late summer and into the fall we’re going to see a very significant uptick in travel. Not as good as 2019, but far better than 2020. That’s as far as I’ll go (with any predictions),” Phillips said, acknowledging that “better than last year” is a low bar to clear.

“We are positioned well for recovery once it’s time to turn the spigots on full blast. It’s a health crisis not an economic crisis,” Mangeot said. “I’m optimistic about the bounce back. The question is when that will happen.”
With 2020 numbers not available in March as interviews were taking place, the commissioner would not make predictions about 2021.

In Louisville, two months before the iconic Kentucky Derby—the state’s biggest single tourist and travel event—Stacey Yates said the pulse rate for hospitality is improving.

“We expect the leisure business to rebound first because of the pent-up demand,” said Yates, vice president of marketing communications for GoToLouisville.com, the visitors bureau for metropolitan Louisville. “We’re seeing some signs of life, especially downtown on the weekends.”

Yates was encouraged by rising numbers for upcoming meetings and conventions, though they are still well below the 2019 boom.

Questions remain, though, about how capacity allowance might grow and whether business might decide to cut back.

“That’s a big unknown,” Yates said.

Louisville is bracing for a second year in which the Derby—typically a $400 million-impact event—will take place with limited box-office. Maximum attendance will be about 40,000, slightly more than a fourth of the 151,000 that attended in 2019.

Yates said she hopes most of that 40,000 are from out-of-state to help drive up hotel occupancy numbers.

Outdoor recreation was a bright spot
The pandemic put a premium on outdoor recreation, where mask wearing and social distancing aren’t difficult, Kentucky travel industry leaders said.

The multicounty region branded as Kentucky’s Southern Shoreline fared better than most last year, said Michelle Allen, executive director of the Somerset and Pulaski County Convention and Visitors Bureau.

“The Somerset area was way better than most. We would not have had the success that we had during the COVID year if it was not for Lake Cumberland and our outdoor recreation,” Allen said.

“Folks were looking to do things outdoors because it’s easy to social distance. Plus, if they were stuck at home, they wanted to get outside. They were able to do that in the Lake Cumberland region and Somerset, whether it was camping, canoeing, kayaking, houseboating, whatever you find on the lake. Hiking was huge for us.”

It was still a decline from 2019, however.

“Did we have a loss? Absolutely. But did we have as much as the rest of the state? No. We did pretty well,” she said. Allen also pointed out that her region, like others in the state, lost special-event and festival business last year.
In 2019, Lake Cumberland and nearby destinations hosted 4 million visitors, including 2.2 million in Pulaski County, Allen said. The overall economic impact was right around $126 million, a figure that excludes marina revenues.

Eastern Kentucky also enjoyed some 2020 success from outdoor recreation, including a commitment from local residents “who decided to become backyard tourists … to discover their own backyards. They decided to hike our trails and get out in our parks again,” said Brandon Pennington, executive director of the City of Harlan Tourist and Convention Commission.

Some of the more popular attractions in and around Harlan are the Black Mountain Offroad Adventure Area, Kingdom Come State Park near Cumberland, Black Mountain Thunder Zipline, and Blanton State Nature Preserve, the only old-growth forest in Kentucky.

Most of Eastern Kentucky was on an upward trajectory in 2019 before the pandemic struck. The lodging sector in Harlan lost about 35% of its business, said Pennington, who also volunteers as the president of an 18-county tourist region that includes much of Eastern Kentucky.

However, he said, other parts of the region were hit even harder as visitors vanished during the pandemic.

“One of the things we’re seeing in our industry is, people are craving to get out and travel,” he said. “And one of the great things about being in Eastern Kentucky is most of our attractions are socially distanced, are uncrowded, and people can come for the experience and stay safe.”

In Berea, which has a significant tourism sector, local cafes and bistros are operating in COVID-compliant manner, said Donna Angel, business and tourism development director. Sidewalk tables and food trucks are resharpening their appeal to customers who are either on vacation or stay-cation for sightseeing, moonlit kayaking, canoeing, hiking the pinnacles, waterfalls and nature trails, watching artist demonstrations and taking train tours.

The annual Berea Craft Fair that in past years drew 30,000 visitors to the hills managed by Berea College Forestry is slated for July 9-11.

Greg Paeth is a correspondent
for The Lane Report. He can be
reached at [email protected]