In normal years, San Antonio’s travel industry is powered by business meetings through the early months, with tourism and leisure travel peaking in the summer. This year, those trends have been thrown out of the window.
As vaccination rates continue to climb, leisure travel has nearly returned to pre-pandemic levels – and in some cases exceeded it, according to several San Antonio businesses interviewed for this story. But business gatherings and corporate travel have returned at a much slower rate and are not expected to return to pre-pandemic levels anytime soon.
Source Strategies Inc., a hotel industry consulting group based in San Antonio, reported Wednesday that hotel tax revenue in San Antonio’s metropolitan area shot upward in the first quarter of 2021, nearly reaching its levels in the first quarter of 2020. Gov. Greg Abbott ordered the first shutdown in March of that year.
In the San Antonio metropolitan area, hotel revenue for the first quarter was nearly $211 million, down 25% from 2020’s nearly $277 million and 40% less than 2019’s roughly $356 million.
But most of the revenue is coming from hotels and other lodgings outside the city’s downtown, where business conventions typically draw travelers who want to stay nearby. In the first quarter, downtown bookings accounted for 22%, while they normally account for 30%, said Paul Vaughn, senior vice president for Source Strategies Inc.
In another indicator of the travel industry’s lopsided recovery, budget hotels and extended stay hotels have nearly recovered their revenue levels from 2019. But high-end downtown hotels – the kind that normally cater to corporate travelers paying on the company card – have been much more dramatically impacted, the report shows.
“Hotels are filling up on weekends, but it’s during the week that we’re missing out on,” Vaughn said.
He said it would take time before that kind of travels returns. Conventions are often scheduled – and canceled – up to a year in advance.
Vaughn previously said that 2020 had the “worst hotel performance” since the company began tracking hotel numbers in the late 1980s.
The report also found that the pandemic may have accelerated a trend among travelers toward using Airbnb over traditional hotels and motels. Revenue for the hospitality company increased 13.7% from pre-pandemic levels in 2019, topping out at nearly $11 million for the quarter.
Going past the first three months captured in the report, many tourism businesses talk about an almost complete recovery from the thrashing they took in 2020.
Davis Phillips, president and CEO of Phillips Entertainment Inc., which owns and operates Ripley’s Haunted Adventure and other attractions in Alamo Plaza, said it was the most attendance and the best revenue they’ve seen on a Memorial Day weekend since his family’s first facility opened in 1987. The weekend was no fluke, either. Phillips said October set records for revenue, as did January, March, April and May.
“My expectation is that this will continue, as we see this pent-up demand, and people may not be taking that big cruise to Europe,” Phillips said, describing his businesses as a regional destination. “We’re looking like we’re going to have the best year we’ve ever had.”
At the San Antonio Zoo, Vice President of Marketing and Sales Hope Roth said the zoo has done better on sunny days than it did before the pandemic.
While pandemic-related indicators such as new infections previously predicted traffic at the zoo – usually for the worse – they no longer appear to have much of an impact.
“Now we’re just looking at the weather,” Roth said.
City Sightseeing San Antonio, which operates double-decker bus tours of downtown San Antonio, also reported near-2019 levels of attendance.
“I’m reluctant to say that we’re back to normal, given the curveballs thrown over the last 14 to 15 months, but we’re close,” said Tom Duff, the bus company’s customer relations manager.
Visitors are also spending more than they have in the past, many tourism businesses say.
Terri Adams, general manager at Natural Bridge Caverns in New Braunfels, said the gift shop has been selling more purses, jewelry, t-shirts, and other merchandise than before the pandemic.
Like other tourist attractions, attendance there is approaching its 2019 levels, and Adams said she feels “very optimistic” about the summer.
Business gatherings and related travel have not enjoyed the same trajectory.
Visit San Antonio has booked 37 large-scale gatherings at the convention center for the remainder of the year, with each set to book a thousand rooms or more on peak nights. An additional 50 meetings that aren’t as large have also been booked in recent weeks.
Though the organization reports that its rate of bookings has accelerated in recent weeks, it still falls short of replenishing the 250 meetings normally booked in a pre-pandemic year.
Since the start of the pandemic in March last year, the city lost 297 citywide and in-house meetings to cancellations, at an estimated $475 million in lost economic impact. Visit San Antonio reported no cancellations in the past two months.
