NASHVILLE, Tenn. (WKRN) — The Nashville Convention and Visitors Corporation provided another grim update Tuesday.
Music City is losing more than $100 million a week in visitor spending; that totals nearly $3 billion since March. With Labor Day around the corner, News 2 has learned hotel bookings have dropped 66-percent over last year, according to The American Hotel & Lodging Association (AHLA).
“In the long-term we got to get back to people traveling the way they were in 2019, in the short term were going to continue to need assistance from elected officials the PPP was helpful, but were going to need more if the hotel industry is going to make it,” said Chip Rogers, President and CEO of AHLA.
On Monday, AHLA released an analysis on how the hotel industry has fared since the start of the pandemic. Millions of employees are still furloughed or laid off following a sharp and sustained drop in travel demand.
Key findings of the report include:
- Four out of 10 hotel employees are still not working.
- Almost two-thirds (65%) of hotels remain at or below 50-percent occupancy, which is below the threshold at which most hotels can break even and pay debt.
- Consumer travel remains at all-time low, with only 33-percent of Americans reporting they have traveled overnight for leisure or vacation since March and just 38-percent saying they are likely to travel by the end of the year.
- Urban hotels are suffering the most and facing collapse with cripplingly low occupancies of 38- percent, significantly below the national average.
- COVID-19 has left hotels in major cities across the country struggling to stay in business, resulting in massive job loss and dramatically reducing state and local tax revenue for 2020 and beyond.
Locally, according to STR, occupancy in Nashville was 38.7-percent for the week ending August 22, compared to 78.1-percent the year prior.
“There is a trickle down effect that touches retail industry, the automotive industry, the gasoline industry,” Butch Spyridon said, CEO of the Nashville Convention and Visitors Corp. “I was talking to the Omni yesterday and I may not get the number right, but just the sales and marketing department has 40 employees– they have 4 on payroll right now– that’s a dramatic reduction in employment and we got to get those people back to work.”
Rogers said the prolonged economic impact of the pandemic has taken an incredible toll on the hotel industry.
“By Spring of next year, I think hotels will be in a position to survive, but we have to get from here to there. And the biggest problem is meeting those debt payments and that’s where the assistance from the federal government has been helpful so far, and will need to continue to be helpful. Because if these hotels fall into foreclosure, if they close their doors it’s going to be many, many years before they can reopen again, so we want to prevent that,” Rogers said.
Fewer visitors means less tax revenue for Music City.
“Without the tax revenue that is generated by the visitor economy is enormous and will be felt specially in Davidson Co.,” Spyridon said.
According to NCVC:
- Nashville is now losing just over $100 million per week. That’s compared to $140 million per week at our worst point.
- The impact on local taxes is major: The local tax loss mid-March to Aug. 22 is $105 million (includes sales tax, hotel tax and room night fees.
- Nashville is likely to lose another $1 billion in visitor spending by the end of the year.
An industry in crisis, with thousands of hotels in jeopardy of closing forever, struggling to pay debt.
“To see so many of these people that have built their businesses and lives over decades in these hotels, to see them lose it all, its troubling, it’s really devastating,” Rogers said.
Stay with News 2 for continuing coverage of the COVID-19 Pandemic.
COVID-19 in Tennessee
(This reflects what the TDH is reporting each day at 2 p.m. CST )
News 2 is reporting on Nashville’s historic growth and the growing pains that come with it. Click here for more Nashville 2020 reports.