By JOHN HOWELL Although the local hospitality and tourism business has lost an estimated $48.5 million in direct spending since the shutdown in March and the prospect of tourism returning anytime soon looks bleak, Mayor Joseph Solomon told the Warwick
Although the local hospitality and tourism business has lost an estimated $48.5 million in direct spending since the shutdown in March and the prospect of tourism returning anytime soon looks bleak, Mayor Joseph Solomon told the Warwick Rotary Club Thursday that Warwick remains of interest for hotel development.
Solomon attended the club’s weekly meeting, during which Kristen Adamo, president and CEO of the Providence Warwick Convention & Visitors Bureau, spoke about the impact COVID-19 has had on the bureau and its 420 members. She projected a loss of $48.5 million in direct spending through Nov. 1, made up of $33.3 million in canceled business and $15.2 million in business postponed to 2021-24. She mentioned the impact the loss of college graduations, conventions and sporting events that draw teams from throughout the region has had on hotel occupancy and restaurants. Her projections do not include weddings and special events.
She said a sampling of five hotels projected a loss of $7.6 million in canceled weddings and special events.
The shutdown came just as about 6,000 cheerleaders were scheduled to conduct a regional competition at the convention center.
“And now in one day, we lost about $3 million, and it’s just kept getting worse. So we canceled all of the business in the convention center through Nov. 1, because that was our best guess. And when the convention center might open, that does not look likely. It’s probably going to be more like January if we’re lucky,” she said.
Adamo said the impact of the pandemic is nine times worse than that of 9/11, a low point in terms of travel.
As a point of comparison, she said that in Fiscal Year 2019, the bureau scheduled 242 meetings, conventions and sporting events resulting in $74.3 million in direct spending, 11,844 hotel room nights booked and 193,528 people attending events.
Adamo said hotels are feeling the impact of the loss of conventions, tourism and business travel and are getting hit on “all sides.” Yet the audience was surprised to learn that while the occupancy rate for Providence hotels was 12.8 percent for April, the rate for Warwick hotels was 27.4 percent. That number does not include the three of Warwick’s 17 hotels, the Holiday Inn Express and the Hilton Garden Inn that were closed or the Wyndham that was being used by the state for the homeless.
Occupancy rates improved in May at 17.3 percent for Providence and 47.7 percent for Warwick as compared to 74.5 percent and 67 percent, respectively, for May 2019.
Solomon, who extolled the city’s partnership with the bureau and spoke of the “millions of dollars” hotel and meal and beverage taxes generate for the city, said even now with travel and tourism at such a low ebb, developers are eying more hotels in Warwick.
He said other hotels want to locate in the city. “They like what they are hearing,” he said citing safety, the city’s “proactive” approach and its location. Solomon did not disclose who is looking to build another hotel in the city, but from his assessment this is a serious inquiry.
The reopening of the convention center is critical to restoring hotel demand and the spin-off business it means for restaurants and other businesses. It’s also a race to be ready when regulations are eased so as not to lose convention bookings to other venues.
Adamo projected it will take three months to complete the convention center transition from field hospital, which fortunately hasn’t been needed because the state did not experience an extreme surge in COVID cases, back to a convention center. She’s hopeful that transition can happen by January of 2021.
“But if we still have it as a hospital, we lose all of that business, say January through March, and Hartford takes it,” she said. “And oh, by the way, some of those people are our repeat customers, and we’ve lost them for good.”
Reached Monday, James McCarvill, executive director of the Rhode Island Convention Center Authority, said the authority has issued a RFP, request for proposals, to restore the center so that it can host events. But, as Adamo points out, there’s no knowing when that might happen. Nonetheless, he said the authority wants to be in the position to do that as fast as possible.
He thought the authority would have time projections by the second week in August. He estimated the cost in the range of $6 million.
Adamo is an optimist, offering a silver lining to her story.
“So we know that there’s pent up demand for tourism,” she said. And her target is local.
“We are in a great location in the drive market because unfortunately, air travel is going to take longer to come back but 20 percent of the U.S. population lives within 300 miles of Rhode Island and that’s essentially a tank of gas. So that’s kind of where we’ll be spending our energy is really doubling down and trying to get that drive market.”
She lauded the governor and Rhode Islanders for making those from out of state feel safe and comfortable here and she feels youth sports events will be among the first activities to make a comeback.
“We do feel like that’ll come back for us because it is outdoors,” she said. “We do have some regionalized tournaments that can come back. And that’s a big business, especially here in Warwick, and then meetings and conventions, we have a really, really robust calendar for 2021 and ’22. Because people are moving things … into those years.”