In Arkansas, the tourism and hospitality industry is a significant source of employment and revenue. Only agriculture is a more substantial business in the state.
Like so many industries, tourism and hospitality are now facing an uncertain future because of the COVID-19 pandemic.
Few industries have fallen as far and as fast. There’s a lot to unpack. For some understanding of what’s happened and, more importantly, what might lie ahead, the Northwest Arkansas Business Journal spoke with Molly Rawn, CEO of Experience Fayetteville, the city’s tourism bureau.
“If travel and tourism survives in Arkansas — and that includes restaurants, hotels and other travel-related business — it will take both the federal and state governments to do everything they can to assist,” she said.
Here’s more with Rawn in an executive Q&A.
Paul Gatling: The COVID-19 pandemic has had a far-reaching impact on our national, state and local economies. But perhaps no sector has taken a bigger hit than the hospitality industry. How much damage has been done?
Molly Rawn: It’s gotten better since restrictions have been lifted and businesses have either reopened or been able to expand services, but April’s 48% drop in leisure and hospitality employment was definitely shocking and something from which the industry is still reeling.
Industry revenue continues to be significantly down. In Fayetteville, the low point was April. Prepared food HMR [hotel/motel and restaurant] was down 42.7% compared to 2019, and lodging collections were down 79.2%.
Also, I don’t think it can be overstated that we’ve all felt the mental toll from this, not being able to travel like we want and connect in person with people we love, or do all those things we love, like live music on Dickson Street.
Gatling: How are you mitigating the impact? What are you most focused on right now?
Rawn: On the marketing side, our focus has been helping local businesses succeed by encouraging locals to support them. We’ve been spreading the message of “Spend a little, help a lot” to Fayetteville residents by ordering curbside when possible, and I believe it’s helped lessen the economic impact. Additionally, we have geared up for our next digital campaign encouraging in-state travel. We developed several different itineraries — modified for COVID-19 — that will result in more overnight stays at local hotels.
Internally, it has been making sure we minimize the impact on our staff and keep as many people working as we can. Like every business, we have a list of projects that are important, but perhaps not urgent, that end up getting delayed. There is no excuse to not be working on those things now. Now is a good time to put in place those building blocks and organizational tasks that make us a stronger team and will ultimately help us better serve our community.
Gatling: When most people in NWA hear the word “tourism,” they probably think of places other than NWA. Places they travel to, as opposed to the other way around. Give some perspective to just how significant the tourism industry is to the region.
Rawn: The hospitality industry is the second largest industry in the state. It is a $5.6 billion industry, employing over 100,000 people. The state lists total travel expenditures in 2018 [which is the latest data available] at $7.37 billion. The four counties in the NWA region account for over a quarter of those expenditures. The city of Fayetteville sees $326 million in sales annually from the hospitality sector, including bars, restaurants and lodging.
Gatling: How are you marketing Fayetteville? How are you encouraging people to travel to the region when there is so much uncertainty about traveling?
Rawn: We are focusing on three things: proximity, outdoor recreation and safety.
Research by Longwoods International shows about 60% of American travelers prefer destinations that require face masks in public, with a third of those reporting they will only visit destinations with mandatory face mask orders. Additionally, research by Destinations International shows travelers are looking for destinations closer to home and places with plenty of outdoor activities to experience.
From January through June, in-state traffic has made up 40% of traffic to our website, followed by Texas at 19%. The pages with the largest increase in views are outdoor-centric: cycling, hiking, fishing and outdoor public art.
So, as a city that has led the way in regard to actions taken to slow the spread, as well as a city that offers a multitude of outdoor experiences a short drive away from our target audience, Fayetteville is well-positioned to be a desired destination.
Gatling: Which parts of the tourism industry here are still feeling the most pain, and which ones will be slowest to come back online when social distancing guidelines are eased or lifted?
Rawn: The entire sector is suffering. It has been incredibly difficult for our hotels. We have seen occupancy at 30%, and they cannot survive on that. That means people out of work.
Our bars have had significant restrictions, and the state has given them few options to pivot or expand their services the way restaurants have been able to do.
However, our event and performing art venues have had the most restrictions, and I think [they] will have to wait the longest for those to be lifted. Businesses that rely on large gatherings are having a particularly difficult time. They will need a lot of help and support in order to survive.
Gatling: How are you dealing with navigating internal communications with your employees and key stakeholders?
Rawn: Since March, much of our staff has been working from home. We recognize this as a critical way to support our team, given child care offerings are limited and the unknown and evolving situation with school in the fall. We have virtual meetings and keep in touch as frequently as possible.
The A&P [Advertising & Promotion] Commission’s monthly meetings have been held virtually, and we make sure to check in with industry partners with a call or video conference. We are still making deliveries to our hotels — dropping off visitor’s guides, trail maps, etc.
Gatling: What concrete steps are you taking to ensure Fayetteville’s tourism industry can bounce back as strong and as quick as possible when the time comes?
Rawn: We are increasing our advertising efforts, keeping in mind what destination research is telling us. The bottom line is that to help our hotels, we need to be talking to potential travelers who live far enough away to warrant an overnight stay.
Next month a new Fayetteville Visitor’s Guide will be available. We tried to focus our content as much as we can on modified activities and outdoor events that are more appropriate at this time.
We are working closely with the city to help bring about changes such as the Outdoor Refreshment Area, increased outdoor dining options and dedicated parking downtown for retail and restaurant pickup.
We created and distributed window stickers that inform patrons they are expected to wear a mask, and we have developed information sheets for restaurants in order to help them stay up to date with the changing landscape of COVID regulations.
Ultimately, the most important tool for economic recovery is inexpensive and widely available, and it is a mask. Wearing a mask will do more good than anything we as an organization can do.
Gatling: How can cities and states that depend on tourism for large parts of their revenue adjust, if social distancing guidelines remain in place through 2022, as reported?
Rawn: Stay updated on the latest industry research and travel-behavior trends, and try as best as possible to offer what people are comfortable with and looking for. Make it easier for people to dine outside and have outdoor experiences. Require and enforce mask wearing.
Gatling: Can you compare COVID-19 to any other event in terms of economic impact upon the tourism industry?
Rawn: This is certainly unlike anything the industry has gone through in my experience or in recent history. Early on, industry leaders compared it to the changing landscape of travel our country experienced after 9/11, but from a tourism standpoint that is no longer a good comparison. Experts say we haven’t experienced a public health crisis of this magnitude in more than a century.
Gatling: Clearly, there will be a lot of businesses that can’t survive this pandemic. What is your expectation of what may happen? What’s the timing on this unfortunate scenario?
Rawn: The stark reality is that the longer this goes on, more businesses will continue to go under. We’ve already seen it happening in Fayetteville. I hate it, and I wish I had the formula for survival or knew when this will be over, but nobody does. All we can do is continue to follow best practices, wear masks and adapt the best we can.
Gatling: Can/should there be federal action to help the hospitality industry like we’ve done in the past for banks, the auto industry, etc.? Can you make an argument for doing this?
Rawn: If travel and tourism survives in Arkansas — and that includes restaurants, hotels and other travel-related business — it will take both the federal and state governments to do everything they can to assist.
Specifically speaking of destination marketing organizations [DMO] like the A&P, we are an important part of a city’s economic recovery toolkit. In Arkansas, our DMOs are structured as municipal units, meaning we have had no access to PPP loans or other relief options. I hope moving forward there is a remedy for that. Certainly any ideas that could help — including federal funding — deserve discussion and consideration.
Gatling: There has been a lot of creativity from businesses in your arena. What are some of the more creative solutions you’ve seen?
Rawn: So much creativity. It’s really heartening. I love how Dickson Street Liquor and Maxine’s Tap Room partnered up to create signature cocktail packages to enjoy at home while participating on Instagram Live. Walton Arts Center has a wonderful weekly webcast, HeARTS to Homes, available for free. I think we will soon see TheatreSquared offer hybrid experiences combining live events with at-home streaming.
Venues are hosting micro-weddings and distant events. Caterers are doing home delivery. Thanks to changing [Alcoholic Beverage Control Division] regulations, several of our Fayetteville Ale Trail breweries began making deliveries early on.
These things have been born of necessity, but I think some of them are here to stay, even post pandemic.