Can a Tourism Comeback Save U.S. Downtowns?

Bartender and restaurateur Niall Hanley poured his first draft beer in his native Ireland at the age of 10 and made his way to Raleigh, North Carolina in 1998. There he runs it Hibernian Hospitality Group, a constellation of bars, beer gardens and restaurants in the districts of Raleigh, including a huge beer hall with 369 types of beer on tap. You could say he feels at home behind the bar.

It’s a perch that gives him plenty of insight into the economic challenges of his adopted home, particularly the slow recovery of downtown businesses as the effects of the pandemic recede. Bars like the Station, its location in Oakwood, just north of the central business district, rely on an ecosystem of customers and events, from business lunches and happy hour meetings to congressmen and tourists all but destroyed by Covid-19 . Although North Carolina Governor Roy Cooper has announced that statewide Covid restrictions will end on June 1st, this ecosystem is still fragile, even collapsed.

“We show up after the fire blows over the woods and woods,” he says. “Everyone emerges and builds up again. How are you planning that, you know? “

Hanley’s venues have been empty or partially empty for months. The Lack of business travelPersonal clerks and tourism have done “collective harm,” says Hanley. “It’s a challenge for everyone,” he says. “I hope that the lack of domestic business travel can be met by pent-up demand from our locals.”

Mayor Mary-Ann Baldwin says downtown is slowly recovering, but offices for downtown firms like Red Hat and Citrix are largely empty as many workers stay at home. The lack of business and convention activity was devastating to the area’s hospitality sector – 66% of the 67,000 workers in the Wake County area were laid off or on leave during the pandemic.

“The real challenge for our inner city is that our main employers don’t work downtown,” says Baldwin. “Everyone works at home. That’s the challenge: When do big employers bring people back to work? Citrix says mid-July. Red Hat says September 1st. ”

According to Bill King, President and CEO of the Downtown Raleigh Alliance, hotel occupancy has been 45% for weeks, while it’s typically 85% this time of year. “This market was heavily reliant on business and corporate travel during the week and this will be one of the last markets to return,” says King.

“We’re trying to let people know that we’re ready to host them so that people will be safe.”

As in cities across the U.S., officials in Raleigh are looking for ways to spark activity and spending in business districts abandoned by the pandemic. Many place their hopes on summer visitors from neighboring cities and states looking for easy-to-drive short breaks. “With the decline in international tourism and travel restrictions in 80% of the world’s countries, local dollars and North Carolinians are visiting,” said Beth Friedrich, who served as the city’s economic development manager in 2020.

To convince vacationers to spend a weekend downtown, the region’s marketing has taken over a pandemic era. North Carolina “Go back to a better placeThe campaign, unveiled in late April, sheds light on the state’s natural resources, including forests and beaches, as well as the urban outdoor experience in places like Dorothea Dix Park in Raleigh. (A picture shows a lonely hotel guest alone on a rooftop in nearby Durham.)

“We’re trying to show that our urban areas aren’t all crowded,” said Wit Tuttell, Executive Director of Visit NC. “There is space, there is green, there is beauty. We try to let people know that we are ready to host them so that people will be safe. ”

Part of Raleigh’s strategy is to support short-term rental giant Airbnb. The companys City portal, a data dashboard released for several city partners last year to address safety concerns, is also used by city guides and tourism officials to target marketing messages. According to Laphonza Butler, Airbnb’s director of public affairs in North America, the program can provide cities with visitor information and even help place marketing materials in rooms on the platform. (Airbnb is now working with 100 such groups in 20 countries). “Travel is returning, but the way people travel is changing,” says Butler. “While traveling to large urban centers was a typical prepandemic, people are now moving to destinations one tank away.”

There are several signs that the demand for travel in the US will explode this summer and fall. Jan Freitag, national director of hospitality analytics at CoStar Group, says vaccinated Americans will be much more comfortable traveling and will focus on domestic destinations. “Two shots plus two weeks creates a good demand for travel,” he says.

Vered Schwarz, president of Guesty, a popular software program for hosts to manage their short-term rental properties, says that summer 2021 reservations are not just 282% above 2020 levels, but 32% above 2019 levels. She names the expected one Boom “vengeance trip.”

“All along the line, we see people who are traveling again,” she says. “The length of stay is also longer, which compensates for the lack of vacation last year.”

One question for cities is, will visitors feel ready to return to city attractions such as restaurants, museums, and theaters? With many facets of life after the pandemic still uncertain, competition for travel dollars can be fierce. Illinois just launched the $ 6 million “Time for me to drive ”campaign, focuses on road drivers, while New York & Co., the Big Apple’s tourism office, is about to do so Start a $ 30 million campaign“NYC Reawakens”, the biggest that ever existed.

For smaller, lesser-known tourist destinations, officials see summer 2021 as a rare opportunity to reset travel habits and perhaps introduce yourself to a new crowd. “People tend to travel in patterns. If you disrupt these patterns, you can win and lose that market share, ”says Tuttell of Visit NC. “It’s an opportunity, but one that we must carefully plan and orchestrate so that we don’t abuse it.”

Raleigh’s resurgent downtown area followed the bigger trend of rediscovering mid-sized cities and encouraging urban life. In the decade before the pandemic, downtown visitor numbers had increased by 50%, according to King, thanks to a growing dining scene, including a number of restaurants James Beard Award Winning Facilitiesand events such as the International Bluegrass Music Association’s annual festival. “People came downtown for food and experience,” says King. “We saw a new kind of visit.”

But that momentum hit a wall with the pandemic. Kerry Painter, director and general manager of Raleigh’s Convention and Performing Arts Complex, which typically hosts 1,300 events annually, has bookings full for 2023 and 2024, but the immediate calendar remains relatively sparse. The cancellation of Covid events cost the city more than $ 203 million in economic impact, which equates to nearly 400 events and more than half a million estimated attendees. Currently, shows in amphitheatres and theaters in the city can be 25% busy. However, according to Painter, Governor Cooper’s announcement that the restrictions would end on June 1 was required to save the summer concert season (most concerts and performances don’t make money without selling 75% or 80% of the tickets). She hopes some conventions will be booked for late fall.

“It’s a bit of a chicken and egg situation,” she says. “The busier the city center becomes, the more workers will choose to come to their offices. But until we can get them back to their offices, it’s difficult to close that circle. ”

Some efforts to attract summer visitors to cities could be hampered by ongoing cancellations related to Covid. Baltimore, for example, won’t hold up Artscape, the largest free arts festival in the country, which typically brings 300,000 people to the city each July and an economic impact of around $ 30 million. The Atlanta Food & Wine Festival was postponed to a date to be announced in the autumn, Houston Livestock and Rodeo Show, originally set for May, all events canceled.

Instead of blockbuster events, Raleigh wants to focus on attracting visiting Carolinians and others to outdoor areas. King says efforts to get set up Parklets and Pedlets Outdoor restaurants and event spaces have been successful throughout the city, and the Dine Out Downtown events on Saturdays, which take over a city block and set up tables and stages for local music performances, were jam-packed every night. “The approach will be how can we make good use of public space?” he says. “We leave the phase of parking cones and spray paint solutions and go inside something more durable. ”

Downtown revitalization can’t come soon enough for Hanley. There are more signs of life. The airport is getting busier; The trickle of workers commuting to downtown offices is getting stronger. Its locations in the Glenwood South neighborhood have caught on and seen a boom in business. But at least for the next few months, when vaccinated Americans slowly reappear, it’s a waiting game.

“There’s nothing to do but hold on,” says Hanley. “Once we get that certain magical number of people, that’s just going to change.”

Before it’s here, it’s in the Bloomberg Terminal.

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