Lodging losses: Local hotels and motels lose millions of dollars worth of business amid pandemic

Posted 9/3/20

Park County’s tourism industry took a beating in the first half of 2020, with spending at local lodging establishments plummeting to about half of what it was at the same point in …

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Lodging losses: Local hotels and motels lose millions of dollars worth of business amid pandemic

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Park County’s tourism industry took a beating in the first half of 2020, with spending at local lodging establishments plummeting to about half of what it was at the same point in 2019.

According to figures from the Park County Travel Council, lodging tax collections were off by 49% through June — and receipts were down a whopping 67% in June itself.

The tax figures indicate that after spending more than $14.9 million on hotels, motels, campsites, Airbnbs and other lodging in Park County in June 2019, guests spent less than $5 million this past June. So far in 2020, between facilities being closed and people traveling and staying in hotels less often, travelers have cut their spending on Park County lodging by $11.28 million as compared to the first half of last year. That’s money not being spent at local hotels and motels, with the vast majority of the losses coming at facilities in the northern part of Yellowstone National Park and the Cody area.

“I’m not gonna mince words here: It is bad,” Park County Travel Council Executive Director Claudia Wade said Tuesday.

However, she does think the drop in spending is not so much an indicator of fewer tourists as it is a result of visitors choosing different accommodations; RVs, for example, have surged in popularity.

“I think that the heads are on beds [in Park County], but I think they’re in campgrounds and in campers and that kind of thing,” Wade said, noting there’s a big revenue difference between a $40 RV spot versus a $200 motel room.

Visitors, she said, “are still in town and they’re still spending.” That’s borne out by state data showing that overall taxable sales in Park County dropped in June, but by a more modest 20%.

Overall, “I hear from people that they’re pleasantly surprised” about the 2020 tourist season, Wade said. “We started the season very, very late in the season this year and it started very slow and then gradually built.”

Yellowstone had a late and slow opening and lodges, cabins and other overnight facilities in the northern part of the park — which lie within Park County — generally remained shuttered through June 15. Since then, only certain facilities in the park have opened amid the COVID-19 pandemic — and that’s played a big part in the precipitous drop in lodging spending.

“When they’re renting out cabins [which are less expensive in Yellowstone], and just a fraction of the rooms in their lodges … that certainly impacts us,” Wade said, referring to lodging tax collections.

  

Visitation sinks at indoor attractions

Visits to Yellowstone’s East Entrance, which sometimes serves as a barometer for local tourism, were down 22% through July, but the drops have been more dramatic at some key attractions in the Cody area.

Visits to the Buffalo Bill Center of the West, the Heart Mountain Interpretive Learning Center and the Buffalo Bill Dam Visitor Center were all off by 49% or more, according to numbers compiled by the Park County Travel Council. For instance, the Center of the West had welcomed 45,422 guests through July, as compared to 89,328 at the same point in 2019.

“I know the Center of the West is practicing safe protocols there, but it’s just a matter of people choosing not to be inside,” Wade said.

She said that “indoor attractions seem to be suffering,” with visitors preferring outdoor activities where they don’t necessarily have to wear masks or worry as much about social distancing.

In-line with the other downward trends, enplanements at Yellowstone Regional Airport have sunk more than 57% — dropping from 21,671 boardings through July 2019 to just 9,174 boardings so far this year.

Still, Wade said some tourist-driven businesses are having a harder time finding workers than finding customers.

“I have heard from several businesses that they are thinking that if they were any busier, they wouldn’t be able to keep up or give the experienced customer service that they need,” she said. “Because everybody is just struggling with workforce.”

Multiple Cody hotels employ foreign workers during typical summers, but COVID-19 has severely limited international travel, Wade noted, while pandemic-related restrictions have curbed capacity at restaurants and added extra work.

Beyond the blow to the businesses themselves, the local and state governments are also taking a hit from the reduced spending. To date, the drop in spending at hotels and motels has meant about $900,000 fewer sales and lodging taxes.

The travel council receives 90% of the proceeds from the county’s 4% lodging tax, which it uses to promote the area to tourists. As of the end of June, the council had received $420,730 — only about half of the $822,866 it had received through mid-2019. The bulk of that shortfall came in June, when collections were just a third of what they had been a year earlier. Given that start to the traditionally busy summer months, Wade said she’d be happy if the council can just get half of 2019’s lodging taxes — but she’s also optimistic about things picking up in the next couple of months.

“We’re perfectly suited to be one of the most popular destinations with our wide open spaces and safe places,” she said.

The travel council recently received $700,000 from the state’s share of COVID-19 relief funds from the federal CARES Act. The “DMO (Destination Marketing Organization) Relief” must be spent by Dec. 20 on projects that weren’t included in the Park County Travel Council’s original marketing plans, Wade explained in a recent report.

The travel council opted to launch a new digital and TV campaign around the theme of, “The Great American Road Trip — Open Spaces, Safe Places.” From September through November, it will promote the Cody Yellowstone area in surrounding “drive markets” as a safe place to visit this fall.

The majority of the $700,000 from the state will go toward that campaign, Wade said, which was created by the Halifax, Canada-based marketing agency Verb Interactive and the Denver-based advertising agency Sukle.

“I’m hoping, as long as [the] weather cooperates, that we’ll have a good strong fall and [be] looking for those numbers to continue well into October,” Wade said.

She’s also hoping to see more people visiting indoor attractions in the fall — and some travelers have already started making bookings for September.

“That is, I think, a good sign for us,” she said. “And we’ll just have to see.”

Tax figures from July will be released within days.

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