Tourism, Hospitality Businesses See Customers Shift Their Spending to Other Locations As a Result of Coronavirus

The travel industry likely will have one of its worst years because of coronavirus, but travel-business operators, industry experts and economists generally agree that consumers will seek wide-open spaces rather than big cities for their next vacation, whether those travels take place in 2020 or sometime in the distant future.

Karin Risko

A prime example is Karin Risko and her business, City Tour Detroit. Risko, an author and popular tour guide, created City Tour Detroit to highlight the city via public and private events and themed tours such as See The D, Notorious 313 Sinister History Tours, Detroit Dine Around, and Incredible Journey to Midnight.

“Due to Covid-19, our offerings are limited,” Risko said. “Group tours, which range from local senior outings or family reunions to incoming passengers on cruise, comprise 50% of our business. We had over $25,000 in group tour bookings scheduled from May to October which have all cancelled since March. These customers usually book our services six months to a year in advance, so we’ll never recoup this lost revenue.

“This would be the peak time for public tours as well,” Risko added. “While I’m getting a few calls, I’m still wrestling with the feasibility of offering these tours on a limited basis for the rest of the summer and fall.”

Risko is not alone. Whether it was pent-up demand, a sense of wanderlust or a desire to support small businesses, tourism dollars tended to flow to rural AirBnbs, recreational-vehicle rentals and areas with interesting outdoor attractions as families and couples sought “safe-distancing friendly alternatives” to places such as crowded amusement parks, busy city center or large hotels, experts said.

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Going forward, the national outlook for the tourism industry and hospitality companies will take time and certain segments are going to face challenges in drawing back their customers until a vaccine for the pandemic is found – something that may not happen until 2021, 2022 or beyond, depending on how quickly such as virus-fighting antidote might be found.

“All the data and also customer behavior shows that the recovery has already started, with many hotels and even motels seeing a surprising occupation increase, even as COVID-19 numbers spike again,” said Lizia Santos, Co-Founder and CEO of City Catt, a Social Trip Planner where you can plan trips with the help of screened Instagram local Influencers as well as friends and family.

“The RV industry is also thriving, and vacation homes in isolated places, as well as outdoor attractions have experienced growth compared to the same period last year, as people seek safe-distancing friendly alternatives,” Santos said. “However, I don’t believe there will be a full recovery until we have a vaccine for COVID, as there is still a large group of people who are isolating and won’t travel until they feel it’s 100% safe to do so.”

Travel realities
Jason Tinsley, Michigan Market Manager for J.P. Morgan Private Bank, said the way Americans used to travel is likely going to fade into our nostalgic past. Air travel where you hopped onto a plane and headed to far-away lands without a care in the world? Nope, not in 2020 and likely not until next year at the soonest.

“Over the longer term, the way we use property is likely to change as a result of the pandemic. With air travel unlikely to be back to normal until 2021, homes that are easy to reach by road or rail look more attractive,” Tinsley said. “The lockdown has encouraged many of us to reassess our priorities. Families that have come together under one roof have rediscovered how important it is to have a safe place to sit out the pandemic. There’s already been increased interest in properties in rural areas with more outside space, which provide the perfect escape for large families.”

Santos, Co-Founder and CEO of City Catt, agrees. Rural or small towns where people could spread out found a renewed interest from travelers – and these visitors may be likely to return in the near future because they had a good time.

“Cities/states that were able to keep their number low will be able to recover first if they’re able to leverage their numbers, showing consumers how efficient they were in dealing with the pandemic at its peak, making them also perfect candidates for hosting visitors in a way that keeps them from contracting COVID while providing them with a fun experience,” Santos said. “Also, I maintain that smaller cities or suburbs adjacent to big centers have a great opportunity here, as cautious travelers seek less crowded spaces and favor under-the-radar attractions and local charms.”

Dave Lorenz, Vice President of Travel Michigan, part of the Michigan Economic Development Corporation, said he has seen more “off the beaten path” locations enjoy a boomlet during this summer because people were willing to explore more. Some areas where people have enjoyed seeing new sights include Michigan’s Upper Peninsula and mid-state locations such as Coldwater with its Capri drive-in theater.

Lorenz traveled most of Michigan over the past month to evaluate how these tourism areas are doing in terms of safety, social distancing and working with consumers to make them feel welcome and comfortable with traveling in these new times. He said he has seen a gradual understanding that “we’re all in this together” among travelers, and he believes people around the state and nation are working hard to make lemonade out of this moment that feels like nothing but lemons.

‘Careful planning’
Pure Michigan is encouraging businesses, visitors and local communities across the state to take the Pure Michigan Pledge, a promise to uphold local safety protocols and CDC travel guidelines to travel safely this summer season and beyond.

“We know residents and visitors alike are ready to get back to exploring and making memories all across Michigan – whether that is a day at the lake, a local craft beverage or a hike through the woods,” Lorenz said. “We also know that health is a top priority, and we want people to know the tourism industry is taking safety seriously. If we all work together – and follow the Pure Michigan pledge – we can continue to experience this great state that celebrates the best we have to offer, while staying safe.”

Lorenz said he expects people to continue traveling into the fall and perhaps through winter, especially as more educational facilities such as colleges, high schools and elementary schools offer virtual learning. He could see families create curriculum-driven travel plans, such as visiting museums or other sites, to make travel last well into the school year, something that is different than most years in general, he noted.

Santos said as a Travel Founder and a mom, she wouldn’t travel now without careful planning.

“The chain of events that one could start by being careless now is huge, as we know it doesn’t take much to transmit the virus, and people can be transmitting without feeling any symptoms,” Santos said. “So, if you’re looking to travel, make data-driven decisions in all stages of planning, from choosing a destination to planning your stay and activities there, favoring less-crowded spaces and places that are taking measures to protect customers.”

Risko said she has used some of her “downtime” during the coronavirus to work on her business, develop new tourism options for her customers and improve her personal fitness.

“In the next month, we’ll be releasing a couple digital tours via the Built Story platform. This is a great way to learn about Detroit while remaining in the safety net of your own family or circle of friends,” Risko said. “On select Friday nights, I’ve been hosting local true crime storytelling sessions on our Notorious 313 Sinister History Facebook page. I’ll be incorporating Detroit food and drink history via Facebook Live on our City Tour Detroit Facebook page starting late-August plus a couple other special history offerings.”

Ultimately, though, she admits she isn’t sure when things will pick up for her and her tourism business.

“The million-dollar question for which I wish I had the answer. I think some people are ready to go travel now. Some of these travelers are concerned about the virus and are somewhat cautious. Other people couldn’t care less about the virus and don’t understand why so much is still closed,” Risko said. “Other people don’t want to go anywhere. Some of my guides are concerned about their health and aren’t ready to give tours. It is a dilemma. Should we even think about giving tours during a pandemic? Lots of things to consider.”

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Karen Dybis
Karen is an editor and writer for Corp! Magazine. She graduated from the University of Michigan and has worked at The Mackinac Island Town Crier, The Kalamazoo Gazette, The (Adrian) Daily Telegram and The Oakland Press. Karen was a Detroit News business writer with stints in retail, workplace issues and personal finance. Dybis also was a blogger on Time magazine's "Assignment: Detroit" project. She is author of four Michigan history books, including "Secret Detroit" and "The Witch of Delray."