COVID-19 serves up heartbreak for hospitality, tourism industries
As the coronavirus outbreak continues to alter the way Americans go about their everyday lives — movie theaters and gyms closed, restaurants offering only take-out, neighbors afraid to ride the elevator together, toilet paper gone from the shelves of grocery stores — the hospitality and tourism industries in the Boulder Valley and Northern Colorado are particularly vulnerable.
With airlines canceling flights, visitors have no need for hotel rooms. With venues shuttered, couples can’t have their weddings catered. With crowds discouraged, concert halls, cultural centers and art galleries become silent monuments to the pre-social-distancing world order.
“It feels a little surreal, doesn’t it?” Loveland Visitors Center manager Gary Light said. “We’re in uncharted territory here. Everyone wants to be able to serve their customers, but they’re torn between being able to do that and being part of the problem.”
SPONSORED CONTENT
Select your Republic Services residential cart now!
In preparation for Republic Services becoming the primary provider of residential recycling, yard trimmings, and trash, residents should now select the best cart size and service schedule for their household needs.
Hotels are hit especially hard as vacations are postponed and conferences canceled. Marriott International, which employs roughly 130,000 people in the United States, announced Tuesday that plummeting bookings will result in worker furloughs.
In Boulder, tourist attractions and hotels “are seeing reduced numbers of visits, more cancellations, and all of that is significant in terms of their business sustainability,” Boulder Chamber CEO John Tayer told BizWest.
In Fort Collins, Visit Fort Collins CEO Cynthia Eichler said she is “ aware of significant reductions” in staffing levels at hospitality firms as a result of COVID-19 closures and cancellations.
“We’ve had almost every client [with events scheduled over the next couple of weeks] cancel on us, and we’ve lost almost all revenue and hours for our employees,” said David Rubin, owner of Boulder-based catering and events services firm A Spice of Life Inc.
“Sponsors of events for nonprofit organizations are canceling; two bar mitzvahs where we were going to feed 500 people canceled; three weddings — 750 people! — canceled,” he said. “Life events just aren’t happening.”
Unlike venues, which typically collect large deposits for events, support services and lodging facilities are often left with empty calendars and empty wallets during periods of mass cancellation.
Because of A Spice of Life’s size and longevity in the industry, Rubin said he can continue operations through a months-long slowdown, “but I would expect some smaller catering companies not to make it.”
A Spice of Life employs 50 full-timers and 75 part-time employees. “I’m going to support everybody the best I can for as long as I can, but at some point, we’re going to have to make cuts,” Rubin said.
“But we will survive,” he stressed. “We have retained earnings in this company that saved us during the floods of 2013 when we lost our event facility. I have a great banking relationship and an excellent line of credit. I could fall back on my house and my equity there. I’ve got my stocks. We will survive, and we will thrive. But right now, this is one the biggest challenges we’ve ever seen.”
Rubin isn’t the only one who is bullish on the industry’s likelihood of survival.
The Lodging Industry Investment Council, an industry think tank, surveyed hotel investors earlier this week and found that many believe the industry will bounce back rather rapidly.
Of those surveyed, “27 percent anticipate full recovery within six months, and an additional 48 percent believe full normalization will occur within six months to a year,” the council reported. “As a result, 75 percent believe full normalization within a year.”
Part of that comeback will depend on the results of “conversations within the industry about what financial assistance they should expect from state and federal relief programs,” Tayer said. “We are also looking and what local support and relief resources are out there.”
Local governments could “consider forgiving or abating some of their fees and taxes during this time,” he said. “That’s a consideration we want to bring to our leadership.”
While relief packages are negotiated and traditional revenue streams continue to dry up, the COVID-19 crisis has forced hospitality businesses to develop creative new ways to earn income.
A Spice of Life operates seven corporate cafes in office buildings around the area. But when those offices send their employees home to work, A Spice of Life has no one at the office to feed.
Some of those corporate cafe resources have been diverted into a newly formed program that provides meal-delivery services to offices that are still up and running. The company is also providing no-contact delivery services for smaller residential orders, which is new for A Spice of Life.
“We’re just trying to do what we can to fill the needs that are still there,” Rubin said.
In Northern Colorado, bed and breakfasts and guest ranches have begun marketing their properties to locals who may have had to cancel springtime trips out of the area, Light said. It could be much easier for a family to get to the Sylvan Dale Guest Ranch for a weekend than to fly out of Denver International Airport to Cancun.
While business may be hurting, Rubin doesn’t blame local government and corporate leaders for prioritizing the health of their constituents and employees.
“They’re doing the right thing, and hopefully we can come together, not only as a country, but as a world,” he said.
Rubin offered a plea to the critical customers who are still patronizing the hospitality industry: “Be kind to your service professionals — this is a tough time for all of us.”
