San Antonio’s $15 billion travel and tourism industry, which has been severely affected by the coronavirus pandemic, will fully recover from the overnight shock it was dealt starting in March – but likely not until late 2023 or after, according to a local industry leader.
That bleak forecast from industry research and experts that Visit San Antonio President and CEO Casandra Matej presented to City Council on Thursday means the tourism bureau will have to adjust its budget projections and consider how that money is spent, she said.
The loss of more than 250 conventions and meetings alone since the pandemic began has had a $410 million economic impact on the city. That’s not taking into account the lost leisure travel or the economic repercussions on small businesses that rely on tourism and hospitality.
“No one has been immune to the impacts of the COVID-19 pandemic, and that’s certainly true of the tourism and hospitality industry,” said Jeff Arndt, VIA Metropolitan Transit CEO and chairman of the Visit SA board. “The past few months have given us a glimpse of what our community looks like without a robust visitor landscape. And it has been costly.”
Visit SA is funded through a portion of the hotel occupancy tax that visitors pay for overnight lodging and Visit SA’s membership fee program. With revenue taking an unexpected hit in 2020, Visit SA cut its budget 42 percent to almost $25 million, and next year it will drop to $21 million.
Nine months into the pandemic, some signs of rebounding in the market have begun to occur. At the start of 2020, the sector employed 140,000 San Antonio residents. Today, the number has risen from a sharp decline over spring and summer to 115,000.
So far, 59 conventions are booked for 2021, with an expected economic impact of $196 million. On Thursday, officials with the airport development conference, Routes America, announced it would host a 2022 conference in San Antonio, bringing 1,000 airline delegates. In 2023, San Antonio will be the site of the U.S. Travel Association’s international conference.
Matej said San Antonio is well-positioned as a destination city to make a comeback due to its strong base of tourism assets and the large percentage of “drive-market” visitors who travel from within the state.
“We are set up to be a destination of choice,” she said. “There is one thing for sure that we know – our industry is resilient. Part of that resiliency is the way our partners have had to be innovative and creative in what they do. There are examples of it throughout our community.”
But recovery will be a “long and volatile process,” she said, and there will be fierce competition among cities looking to host conventions and events which are expected to attract smaller audiences.
The tourism bureau’s strategic plan calls for focusing its sales and advertising on the regional market, including Mexico, and on health and safety as a “shared responsibility” between San Antonio and the visitors, Matej said. Visit SA is also planning to “retool and relaunch and engage” the membership model it created three years ago.
In December 2018, the council approved a new fee for hotel guests that created the Tourism Public Improvement District (TPID), and in January 2019, the TPID began collecting a 1.25 percent fee per night from guests staying in hotels with 100 or more rooms. A portion of those funds pay for Visit SA’s marketing and advertising initiatives.
The council will vote at its Dec. 10 meeting to approve a $5.48 million TPID service and assessment plan for 2021. The spending plan is about half what the TPID board had projected when the tax district was enacted.
“The initial projections were that by 2020, the first full year that the TPID would be in effect, at least $10 million would be generated by our local hotels,” said Henry Feldman, owner of the La Quinta Inn & Suites Conference Center in the Medical Center and chairman of the San Antonio TPID.
“We all know that the COVID-19 pandemic upset those hopes for now. But one truth remains today. The TPID and its potential are great for this community, and [it] provides the necessary fuel to drive Visit San Antonio’s efforts to spur the recovery of … such an important tourism industry.”