Visit Philadelphia, which focuses on drawing leisure tourists to the five-county region, eliminated 18 positions — 36% of its 50-member office. The Philadelphia Convention & Visitors Bureau (PHLCVB), meanwhile, laid off 17 people, reducing its 66-member staff by almost 26%.
Both groups are nonprofits, and their respective budgets depend largely on funding from the city’s hotel room tax. Occupancy of those rooms has plummeted.
A spokesperson for PHLCVB said layoffs were a “last resort,” and that the organization expects to cut its budget almost in half for its next fiscal year.
"With an estimated 30% decline in hotel occupancy and a loss of over $468 million in hotel room revenue through 2020, and a projected 43% decline in our fiscal year 2021 budget, we were forced to make the painful decision to implement layoffs,” said Alethia Calbeck, a PHLCVB spokesperson.
Jeff Guaracino, president and CEO of Visit Philadelphia, said the financial outlook for tourism has gotten only worse.
“The market forecast has been lowered even more, and the recovery goes well into 2021 and beyond," he said. "Full recovery for the industry is not projected for five years nationally.”
Visit Philadelphia was approved for a $1 million loan through the federal government’s Paycheck Protection Program (PPP) earlier this spring. In April, Guaracino told The Inquirer that the funding covered two months’ worth of staff salaries, and meant he could avoid furloughing employees at the time.
But the organization ultimately decided to return the funding.
“Like many companies, we can confirm that the PPP was returned in compliance with the [Small Business Administration] rules as the federal agency released more than a dozen updates,” Guaracino said Wednesday. “Despite the return of the PPP, Visit Philadelphia kept our commitment to all of our employees for the full eight-week period the PPP would have otherwise covered.”
Employees were notified of the layoffs on June 3, and will be paid through June 12, Guaracino said. “Every single department across the board was impacted.”
Guaracino said “the greatest asset of Visit Philadelphia is our team.” He added: "The decisions that we had to make also had to be in line with how to make sure the organization can fulfill its mission to help rebuild the industry and do our part.”
PHLCVB “first cut expenses drastically” and then implemented furloughs and pay cuts starting April 6, before employees were laid off on May 27, Calbeck said.
Outgoing president and CEO Julie Coker, who had already accepted a new job as head of the San Diego Tourism Authority before the pandemic, “delayed taking that position for two months and forfeited her salary for the month of April as well as the vacation payout she was owed upon her departure,” Calbeck said.
Coker’s last day at PHLCVB was May 29. Her successor, Gregg Caren, previously served as an executive vice president at ASM Global, a firm that operates venues such as the Pennsylvania Convention Center.
News of the layoffs at the tourism groups comes as historic protests against racial inequality have, for more than a week, gripped a city that is predominantly comprised of people of color.
“We are committed to ensuring that equality and inclusion are pillars of our destination and we commit to leveraging our strong community connections and our PHL Diversity division to ensure that the economic benefits of tourism extend to all diverse communities in Philadelphia,” PHLCVB said in a June 3 statement.
Calbeck told The Inquirer that before the layoffs, the bureau’s staff was 32% “racially diverse” and 68% white. After the layoffs, she said, the 49-person staff is 33% racially diverse, and 67% white.
Visit Philadelphia, on its website, has highlighted black-owned restaurants and shops and boutiques to support, as well as museums and other destinations that showcase black artists. For a time, Visit Philadelphia also paused visitors to its website with a darkened screen and a countdown clock that lasted for 8 minutes and 46 seconds, the length of time that George Floyd was held under the knee of a Minneapolis police officer when he was killed.
Within the organization, Visit Philadelphia is “providing support, and giving people an opportunity to have a platform to talk about their experience and their truths,” chief innovation and global diversity officer Rachel Ferguson said.
“Diversity, inclusion, and equity is part of the DNA of Visit Philadelphia,” Ferguson said.
Before the layoffs, Ferguson said, 42% of the staff was diverse, and now “the employees in the remaining positions are 47% diverse.”