A couple walks through a quiet Grove Arcade, usually bustling with shoppers, November 17, 2020. (Photo: Angela Wilhelm/[email protected])
At the Engadine Inn and Cabins in Candler, they’re banking on the Santas — 1,200 of them, to be exact.
“The tree we put up is really big — it has about 3,000 lights and 1,200 ornaments, all Santa Claus ornaments,” said Rick Bell, who owns and operates the inn with his partner, Tom Watson. “Some of them are wood, some plastic, some made out of natural things. It takes four or five nights just to get the lights right…and a half-gallon of scotch.”
Bell was joking about the scotch, probably, but he’s serious about the tree being just right, because it’s magical in another way: it brings in a lot of visitors every year.
And in this pandemic-dominated year of 2020, businesses like the Engadine Inn need all the tourists they can get. A near total shutdown in the spring to stem the spread of COVID-19 crippled the hospitality industry, causing visitation and hotel occupancy to plummet by about 80%. For the year, hotel room demand in Buncombe County has rebounded some, but it is still down 46.6% for the year through September, according to the industry research firm STR.
That’s a trend hoteliers, retailers and restaurateurs hope to reverse — or at least hold at bay — with a strong holiday season.
Thirty years ago, the Asheville region’s tourism industry largely shut down once the cold weather set in and the leaves were off the trees.
“There was a time when Asheville tourism pretty much stopped after October,” said Chris Cavanaugh, interim executive at the Buncombe County Tourism Development Authority. “Even the Grove Park Inn was closed through the holidays and the winter. Obviously, that’s no longer the case.”
Now the time from Thanksgiving through New Year’s has become one of the area’s busier seasons, and those thriving holiday seasons have become absolutely essential for local tourism-related businesses.
In a normal year, the Asheville area hosts 3.9 million overnight visitors and 11 million visitors overall, and the estimated $2 billion those tourists spend supports about 27,000 local jobs, according to the TDA.
The TDA touts its relationships with 1,300 “tourism partners,” defined as businesses that directly count on visitors as a portion of their customer base. They run the gamut from restaurants to outdoor outfitters. Bell said the holiday season is critical for many businesses, especially for these tourism-dependent operations, to build up a nest egg for winter.
“Let’s just put it this way: December more than pays for itself,” Bell said. “It’s not like in January-February-March, where you have to be really careful. You have to be careful with the money you make in the fall, because that carries you through the winter.”
A somber picture
In an October meeting of the TDA, Cavanaugh offered a somewhat somber presentation, including these sobering statistics:
• In Buncombe County, hotel room demand cratered in April, when it was down 82% from the previous April. It has slowly rebounded, with the decline registering 38% by July and 24% in August. September showed just an 18% drop from September 2019, according to the tourism industry research firm STR.
• Nationally, weekly travel spending dropped almost 90% in March and April, and by early October was still down by 34% in North Carolina and 43% nationwide, according to Tourism Economics, a global research firm that works with 300 companies, associations and destinations annually.
• The research firm Destination Analysis found that 69.5% of Americans have canceled a trip this year, and 55.6 postponed one.
• Group and business travel essentially dried up during the pandemic, causing drastic declines in hotel demand. As of August, demand for high-end hotels was down 52.8% nationally, and 22.3% for mid-level and economy hotels, year over year, according to STR.
During the meeting, Cavanaugh cautioned the board against “irrational exuberance” for the fall season, which was surprisingly strong, locally.
“I am concerned about what the holidays are going to look like, and then certainly after that what the winter months are going to look like,” Cavanaugh said in an interview in November. “At this time of year, visitation and demand is driven moreso by indoor events than it is at other times of the year, with the Biltmore House Christmas celebration and events like the Gingerbread House Competition at the Grove Park Inn.”
The gingerbread house competition went to a virtual format this year, and while the Biltmore Estate is open and decorated for Christmas, but COVID-19 restrictions limit the number of people in the house at one time.
“Normally what happens is once Thanksgiving hits and the Biltmore opens up its night-time Christmas thing, we see an increase — not like fall demand — but business is definitely OK in December,” Bell said about the Engadine. “It will be interesting to see this year, with what the Biltmore is doing, if it’s like the last few years or if it falls off.”
Bell stressed that his operation, which includes the five-room inn and six separate cabins, has been doing really well, probably because tourists seem more comfortable with separated facilities.
“The stand-alone cabins, they’ve just gone crazy,” Bell said. “We had a better summer and fall with just the cabins than in the six years we’ve been here. People have been very interested in booking places they can get to easily and then can be alone.”
Bell is also president of the Asheville Bed & Breakfast Association, which represents 15 inns, and he says anecdotally he’s heard about half of them have weathered the pandemic decently. Christmas season bookings look strong so far, Bell said, but with COVID-19 cases on the rise nationally and in North Carolina, he has concerns.
Similarly, short-term vacation rentals have seen “a significant uptick” in reservations in recent months, Cavanaugh said.
Biltmore Estate, Omni Grove Park Inn weigh in
Weathering the pandemic sounds all too familiar to folks at the Biltmore Estate, where about 30% of annual revenue is generated during the Christmas season, according to spokeswoman LeeAnn Donnelly.
“Our average visitation over the holidays, which runs November through early January, is 400,000,” Donnelly said. “This is only slightly higher than other seasons, due to its relative short time frame compared to other seasons like summer.”
The estate also operates two hotels, and Donnelly said Christmas is “a part of the prime season for our lodging business, with the season actually beginning in October with fall color.”
This holiday season, the estate is operated at reduced guest capacity to adhere to public health mandates and federal guidelines for COVID-19, she said. Biltmore also made adjustments in other areas, such as making the annual Christmas tree-raising day an online event, and opting for smaller instrumental groups instead of large choirs during the candlelight Christmas events.
The estate had to close earlier this year, the first time since World War II, and the pandemic downturn resulted in layoffs of about 400 employees. Visitation has rebounded, though, and the estate’s workforce has stabilized, Donnelly said.
“We are hiring for open positions at Biltmore right now, and overall our seasonal hiring is approximately the same as it has been in years past for the holiday season,” Donnelly said.
Across town in North Asheville, another driver of local tourism, the Omni Grove Park Inn, had to take its Gingerbread House Competition and the public display of the houses online. In years past, it’s brought in visitors from all over country, according to Grove Park Inn General Manager Gary Froeba.
As with many businesses in Asheville, the holidays have become instrumental for economic success at the Grove Park.
“Approximately 40% of The Omni Grove Park Inn’s total revenue is generated in (the fourth quarter), making the holiday season important to our business’ success,” Froeba said.
Last season, from Nov. 18, 2019-Jan. 3, 2020, the hotel had about 125,000 guests while the gingerbread houses were on display.
“In 2020, we’re expecting an estimated 20-25% decrease in overnight guests and overall traffic when compared to previous years,” Froeba said. “Our restaurants and Spa are at 50% capacity in accordance with current North Carolina state requirements, and those outlets are typically closer to 100% capacity during the holiday months.”
Smaller hoteliers also felt the pinch.
H.P. Patel, president of BCA Hotels, which operates Best Western, Glo and Comfort Inn hotels in Asheville, said their occupancy is down 30-35% for the year, although the fall color season was strong.
“The last week of December is typically pretty busy for us, but I do think it will be slower this year, and going into the winter months,” Patel said, citing Biltmore’s decreased capacity as one reason.
His hotels did temporarily lay off some of its 50 workers, Patel said, but “we’ve brought most of our employees back.” BCA applied for the federal Paycheck Protection Plan, and that helped weather the storm.
At the Asheville Hotel Group, which operates five hotels in the Asheville area, including three Hampton Inns, Chief Operating Officer Brenda Durden said they’re at full staff, although they did have some employee furloughs earlier in the year. Looking ahead, Durden said Christmas season has been “very popular” for their hotel properties and plenty of local businesses, but it’s not their top season.
Still, it’s important, and “our projections show a significant loss in occupancy and revenue for the upcoming months,” Durden said.
“Hotels are not the only impacted business,” Durden pointed out. “Everyone in the hospitality sector will be affected — restaurants, gas stations, retail etc. It is often overlooked how far-reaching tourism affects our local economy.”
Restaurants are stressed
At the Asheville Independent Restaurants Association, Executive Director Jane Anderson said these are incredibly stressful times for restaurant owners and operators. AIR, a nonprofit, represents over 100 local restaurants.
“As with all things COVID, the restaurant world changes by the day,” Anderson said. “The recent spike in COVID cases all over the state and country is putting a big black cloud over Thanksgiving for everyone.”
In Asheville, over two dozen restaurants and bars have closed since the spring, when state mandates temporarily shuttered or restricted restaurant capacity to slow the spread of COVID-19.
The local food and beverage industry survives with support from about an even 50/50 split between tourists and local loyal customers, although some are heavier in either direction, Anderson said.
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“We could not exist without our loyal locals,” Anderson said.
With restaurants still limited with capacity restrictions and scrambling to shift to take-out systems or outdoor heated seating, the upcoming winter season is worrisome.
“Frankly, January and February, which (were) the usual slowest months in pre-COVID times, are the months to worry about,” Anderson said. “The restaurants were just emerging from those slow months last year when COVID hit.”
As year goes on, tourists more important
At Mast General Store in downtown Asheville, General Manager Carmen Carbrera said for the first six months of the year, typically, their business is mostly locals.
“Then in the second six months, it’s probably 75% tourists,” Cabrera said, adding that overall for the year they have about a 60-40 split, with tourists dominating.
The holiday season makes up at least 20% of their overall business. Judging from recent weekend crowds, Cabrera is cautiously optimistic about the holiday run.
“With the tourists we’ve seen on the weekends recently, we’re full,” Cabrera said. “And they’re spending money.”
For the year, though, Mast remains well below last year in sales.
When will the recovery come?
Cavanaugh, who regularly pores over industry statistics, said indications are tourism won’t fully recover until 2023. While it has been slowly picking back up, Cavanaugh said in his TDA presentation the recovery will be “fragile and very uneven for months to come.”
“The availability of a vaccine will help but is no guarantee of a quick return to pre-pandemic levels of activity,” he said in the presentation. “Buncombe County is well positioned for recovery but will also face significant competition for time and dollars.”
Two pharmaceutical companies, Pfizer and Moderna, announced positive test results for their COVID-19 vaccines, with more than 90% effectiveness. While some distribution may take place this year, Dr. Anthony Fauci, “the nation’s leading infectious disease expert who has guided the U.S. through the pandemic, projected Americans could expect their first doses of an approved coronavirus vaccine as early as April,” according to a recent USA Today article.
Cavanaugh said most travel planners are pushing many events into the second quarter of 2021 and beyond.
Citing data from the research firms STR and Tourism Economics, Cavanaugh said projections show hotel demand in 2021 will reach 81% of what it was in 2019. But it won’t return to normal until 2023.
All-important room revenue will decline by half this year, falling from $168 billion last year to $81 billion this year, nationally. It will slowly rebound in 2021, to about $113 billion and continue climbing, but it won’t get back to 2019 levels until 2024.
Forging ahead with a new hotel
Still, as Cavanaugh says, the timer starts ticking for that recovery in the second quarter of 2021.
Patel is counting on that steady return to something resembling normalcy. By the end of February, he plans to open his fourth hotel, a Tru by Hilton, in East Asheville.
Asheville is primarily a leisure tourism market, and that will help the area as it recovers from the pandemic, because a lot of travelers will avoid large cities and big convention halls for a long time to come, Patel said.
At Biltmore, which normally hosts 1.4 visitors a year, Donnelly says they’re “in a period of strong recovery right now and remain optimistic about 2021.” Market research shows traveler sentiment has continued to improve for the last few months, and the long-term travel outlook is positive.
“We believe Biltmore and the entire western North Carolina tourism sector is positioned well, with significant pent-up demand for travel,” Donnelly said.
Staying optimistic, cautiously
At the Omni Grove Park Inn, Froeba acknowledged that “business volumes have not returned to pre-pandemic levels” and the hotel did not hire for the holidays at the same levels as years past.
“We remain optimistic that in the relatively near future the effects of the pandemic will fade, and we will be able to welcome back a full complement of associates, but we are painfully aware that that time has not yet come,” Froeba said, noting that COVID cases continue to spike in North Carolina and other states.
Projections for occupancy in the first quarter of 2021 are about 25% less than in years past, Froeba said, “mainly due to the lack of group business travel and anticipated capacity restrictions.
In “the good news department,” Froeba said, “a vaccine does seem to be on the horizon for early 2021, or at least spring.”
Back at the Engadine Inn, meanwhile, Bell is trying to stay upbeat. Bookings have been up for late December, he said, although like others in the business he noted travelers are waiting until late in the game to make reservations.
So for now, they’re working on that tree.
“We really do go all out for Christmas when we decorate the inn,” Bell said. “People will ask if we have the tree back up before they come.”
Some guests will bring Santa ornaments themselves.
“December really is important — it’s kind of that last hurrah,” Bell said. “And if you’re able to put away a little more money, it’s good to have that little rush. Because once January hits, it’s really pretty bleak.”
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