Convention chief: Hospitality industry needs federal help, expects ‘long, slow’ recovery

Hospitality, travel, and tourism have been the hardest hit industries during COVID-19. Think restaurants, hotels, caterers, meeting facilities, trade shows and the cottage industries that support those businesses ranging from florists to event planners to lighting and banquet logistics companies.

Gretchen Hall, CEO of the Little Rock Convention & Visitors Bureau, views it as the business challenge of a lifetime and the end is nowhere in sight.

“It’s going to be a long, slow process,” Hall said of the economic recovery from the pandemic. “And from the group and convention booking standpoint, it may take another 12 months to really start seeing substantial numbers of group and large-scale events.”

For the state, tourism is a $7.4 billion economic engine with hundreds of thousands of jobs. The state’s most populous county, Pulaski, accounts for about 25% of the entire state’s travel and tourism economy – about $1.8 billion.

From mid-March when the pandemic hit the state to first of August, Little Rock Hotel revenue is down 58%. Food tax collections were down more than 30% in April and May, but only down 9.6% in July. Convention and facilities cancellations have totaled 316 so far this year.

Hall said cancellations and the subsequent downturn surfaced immediately when Arkansas reported its first case of COVID-19 in mid-March. When asked if the drop-off was as bad as expected, she said it was “maybe worse.”

“How quickly did it happen? Almost overnight. We went from having the most events on our books in any calendar year going into 2020 after having a fabulous 2019 as far as tourism numbers go. We had a great January and February, and we were marching along in early March. And literally within about 48 hours after COVID started in the state of Arkansas, we had hundreds of event cancellations,” she said.

“It just went from having busy facilities to having very dark facilities. And at that point, we didn’t really have a clue how long this was going to last. So it has lingered much longer than any of us anticipated and it has been brutal,” Hall added.

There has been a three-prong approach to managing during the pandemic. Hall quickly began mitigating expenses, which led to furloughs and other cost controls. Secondly, she and her team have been involved in state and federal advocacy for the many businesses that rely on the convention and tourism business. Finally, there has been an effort to capitalize on research to better understand what the “new normal” may eventually entail.

“The third component is really following some of the research and figuring out what the ‘new normal’ coming out of this is going to be, and how we can target specific industries and how we can maximize what Little Rock and the state of Arkansas has to offer from a tourism standpoint in order to be fully prepared when the recovery actually happens,” Hall said.

Though now on recess, Congress has been debating another financial package that many quasi-public groups like the Little Rock Convention & Visitors Bureau or Simmons Bank Arena hope can provide partial relief that eluded them in the first round. Federal officials are also looking at industry-specific targeted relief for the tourism and hospitality industry.

“In the first CARES Act, there were some relief benefits through the PPP [Paycheck Protection Program] for our independent businesses. Unfortunately, organizations like the DMO [destination marketing organization] or Little Rock Convention and Visitors Bureau, so far, we have been eligible for zero support through the state or the federal funding. We’re a quasi-government agency and so we haven’t been able to tap into any of that PPP or even the Arkansas Ready for Business programs for the PPE [personal protective equipment] funding for all of the sanitization and those kind of things,” Hall said.

“I think in the new CARES package, or HEALS package that they’re calling it, that second round of PPP will be very important for a lot of our private industries. Right now, one of the proposals actually has organizations like ours eligible for that as well and that would be a tremendous relief for us moving into this. Unfortunately early on, we had to furlough a significant number of our team members and they’re still on furlough. And it’s just unknown when we’re going to have the business to be able to bring those employees back. And without some additional funding support, like those PPP programs, we may not be able to do that.”

Hall is not only wearing her Little Rock Convention & Visitors Bureau hat when she advocates for assistance. She is the chair-elect of Destinations International, the world’s largest resource for official destination organizations, convention and visitors bureaus (CVBs) and tourism boards. Destinations International serves destination marketing professionals, and has almost 6,000 members and partners from nearly 600 destinations across 13 countries.

So Hall is plugged in with a network that is likely to see the first signs of recovery, albeit from abroad, and that’s an advantage for Little Rock and Arkansas. Still, she’s unsure when a permanent turnaround will begin.

“I wish I had a real answer for that. Unfortunately, my answer literally changes daily with all of the research that we can get our hands on,” she said.

Watch her full interview in the video below.