Philly’s tourism economy has already lost $1 billion because of coronavirus — and faces a long road back
Philadelphia and its attractions are normally bustling this time of year with springtime tourists and other visitors. Now, a hospitality industry that supports almost 200,000 jobs is practically in hibernation.
Shuttered restaurants and museums. Canceled meetings and events. Even the Liberty Bell and Independence Hall are closed.
Philadelphia and its attractions are normally bustling this time of year with springtime tourists and other visitors. Now, a hospitality industry that supports almost 200,000 jobs across the city and its four suburban Pennsylvania counties is practically in hibernation during the coronavirus pandemic.
The days of lost economic activity — already pegged at more than $1 billion — are adding up. And the nights of empty hotel rooms are eating into the budgets of local tourism promotion agencies, such as Visit Philadelphia. That’s money for advertising that will eventually be needed to lure tourists back, once it’s safe.
“We’re going to have all these major cities and destinations competing for people’s time and money,” said the group’s CEO, Jeff Guaracino.
And while some businesses such as retail are eyeing a partial reopening as early as May, tourism officials are cautiously optimistic that some meetings and leisure trips will pick up in the fall. How, exactly, people will “change their travel behavior” is an open question, Guaracino said.
Visit Philadelphia, which is largely funded by the tax guests pay on hotel bookings, estimates that it will lose at least $6.3 million for its fiscal year that ends Sept. 30. That’s more than a third of the organization’s $15 million budget.
Guaracino was facing the prospect last week of furloughing staff for the 501(c)(3) nonprofit, which is the Philadelphia region’s official tourism promoter. But Visit Philadelphia was approved for a $1 million loan under the federal Paycheck Protection Program, part of the government’s growing coronavirus economic rescue package. The funding will cover two months of staff salaries in the 50-person office.
“We have an obligation to return on that investment,” Guaracino said, adding: “It will be a competitive advantage for us to get back to market quicker.”
In January, tourism officials from across the region got up on stage at the Pennsylvania Convention Center for a celebratory event, announcing new campaigns and partnerships for the coming year. Now, a weekly meeting among many of those same officials revolves around the pandemic — “to talk about recovery, and what might some of those messages be when it’s time to pivot,” said Julie Coker, president and CEO of the Philadelphia Convention & Visitors Bureau.
The Philadelphia region drew 45 million visitors who spent $7.6 billion in 2018 (the latest year for which numbers are available). This year, the city has already lost an estimated $1.1 billion in economic activity related to tourism, according to Visit Philadelphia.
The U.S. Travel Association, a trade group, estimates that the financial fallout to the industry nationally will be nine times worse than after the Sept. 11, 2001, terrorist attacks. About half of 15.8 million travel-related jobs are projected to disappear by the end of April — a “catastrophic” figure, the group says.
“The future of the country in the short term in particular is really going to be dependent on these destinations being able to survive and help the economy rebuild,” said Tori Emerson Barnes, an executive vice president at the U.S. Travel Association.
The Paycheck Protection Program offers one potential lifeline, though unlike Visit Philadelphia, many tourism promotion groups don’t have that option.
So-called “destination marketing organizations” that are organized as 501(c)(4) or 501(c)(6) nonprofits — including several in the region — or that function as an arm of a local government, can’t apply for PPP. The U.S. Travel Association is advocating to change that in future legislation.
In Montgomery County, where the King of Prussia Mall and George Washington’s famed Revolutionary War encampment are major draws, the Valley Forge Tourism & Convention Board, a 501(c)(6), has furloughed 12 members of its 28-person staff.
The board has strong cash reserves, CEO Mike Bowman said, but is exploring other funding options. "We’re looking at every avenue that’s out there, but we’re not panicking,” he said.
Visit Bucks County expects to lose more than half the revenue it normally collects from taxes on overnight rooms, dropping from $5.1 million in 2019 to $2.4 million this year, based on projections by the advisory firm Econsult Solutions Inc.
“It’s a pretty large gap there that we need to figure out how to shore up,” said Visit Bucks president Paul Bencivengo. His group has already cut $1.7 million in planned advertising spending.
Tourism groups are still finding ways to promote a sense of place and local unity during the pandemic. Visit Bucks County curated a playlist that features homegrown artists (among them Pink, who hails from Doylestown), and it has helped hospitality businesses find low-interest loans through the county’s redevelopment authority.
The Valley Forge Tourism & Convention Board is selling “#MontCoStrong” T-shirts as a fund-raiser for the county’s COVID-19 Response Fund.
And Visit Philadelphia’s Facebook streaming show — Philly Live Weekends — is featuring chefs, performers, and other businesses and attractions that have been affected by the shutdowns. The programming also draws attention to the city’s PHL COVID-19 Fund, and the shows have racked up almost 700,000 views over the last five weekends.
To chart the path ahead, Guaracino and his staff are tracking consumer sentiment about travel experiences, week by week. “You need the data to give you the insights,” Guaracino said. “That’s going to be critical for us."
For instance, tourism promoters say, if would-be travelers are not comfortable flying, Philadelphia is well-positioned as a driving destination. The city is within a five-hour drive for about 40% of the U.S. population.
Bowman also expects marketing efforts to shift toward stay-cations, and encouraging locals to explore the region.
The message for now, he says, remains focused on health and safety. “If you come out the wrong way with marketing, too quick, too early, it could backfire,” Bowman said. “There are a lot of unknowns.”
Joanne Tozzi runs a concessions business that staffs the coat and luggage check for events at the Pennsylvania Convention Center, through a contract with Aramark. She is envisioning needing to create more space between people standing in line to check in their belongings — and perhaps offering to sanitize people’s bags, as well.
January to June is usually her busiest period, and events at the convention center make up the largest portion of her business. For now, that’s all gone.
“I think it’s going to take a while for people to want to return to being in crowds,” Tozzi said, adding: “Everyone in the hospitality industry is going to have to think about new ways” to accommodate that reality.