Hamilton Herald Masthead


Front Page - Friday, January 7, 2022

Cautious optimism for tourism in 2022

Chattanooga banks on leisure travel, sees strong results from targeting pent-up demand

Two years ago, Tennessee’s tourism economy was roaring. State and local officials touted record-breaking numbers, and 2019’s many successes were well positioned to carry into 2020 and beyond.

Then came March 2020. The state’s tourism economy, fueled by restaurant, retail, hospitality, attractions and related businesses, was hobbled by the abrupt and total shutdown of operations. Leaders at every level went into crisis mode, putting plans into place to share information and support around all things COVID-pandemic related. Those included daily, then weekly, strategy meetings between state tourism officials and their local counterparts, chambers of commerce and their member businesses and other stakeholders that continue today.

Masking and social distancing are part of safety campaigns. Online events replace live ones. New marketing campaigns push the state’s accessible outdoor activities. No idea was turned away, and through a combination of new approaches and solutions the state’s tourism economy slowly began to make its way out of the red during 2021.

Now, as 2022 arrives with a new COVID-19 variant surging, those same tourism officials who were excited about 2020 say they are optimistic about 2022 – cautiously so, maybe, but still upbeat.

Getting the word out

“The leisure and hospitality world in Tennessee has been so resilient,” says Mark Ezell, commissioner of the Tennessee Department of Tourist Development. “The people within it have shifted to do what’s needed to provide assets that create great memories for visitors. We saw that in people taking advantage of our outdoor assets and those small-town getaway spots that could provide a safe environment for folks to come and have a good time.”

While the department won’t have final 2021 visitor and economic-impact numbers until spring 2022, Ezell says monthly leisure and hospitality tax revenues demonstrate a strong recovery from the worst of 2020.

“Our September numbers, which are the most recent, show that most of the state has returned to 2019 levels,” he continues. “The areas that haven’t, primarily around Nashville and Memphis, haven’t only because they are still depending on a lot of convention business and international travel to return.”

International travel returned to Nashville Dec. 9, he adds, with the British Airways’ nonstop from London. “So we’re going to see that turn around.”

In fact, the return to travel, to normalcy, will be the state’s key messaging going into 2022. Even though there may be an asterisk after normal, since many things will look different. Don’t expect sanitation stations to go away, for example. The goal is to reset travel and tourism conversations to where they were following the boom years of 2016-19, Ezell says.

“During that period, Tennessee was the fastest-growing state in America for international visitors,” he says. “We were drawing visitors from around the world. And at the recent Travel South USA meeting in New Orleans, we saw how excited the international community is about coming back to Tennessee.

“They want to visit Nashville, they want to visit Memphis, and we have provided more education about the [Great Smoky Mountains National Park] and East Tennessee, there’s more interest about the destinations there.”

Ezell says tourism spending grew by 50% across the state during the three-year period ending with 2019, topping more than $150 million annually.

“We’re anxious to get that back. We’re meeting with travel journalists now, and we want to make sure they know all our options. They want music, the outdoors, culinary destinations … all the things that factor into our most well-known brands.”

The department also asked for and received more funding from the state Legislature. A chunk of those new dollars went to new markets that include Detroit, New Orleans, Orlando, Washington, D.C., Huntsville, Lexington and Raleigh-Durham. Tapping into those areas, as well as the local-travel and drive markets already targeted, boosted the state’s marketing outreach from 30 million-40 million to as many as 70 million.

It appears to be working, Ezell notes, with Tennessee destinations turning up in Top 10 lists of where visitors are from.

“Adding those markets into ones where we’ve been for a while, such as Atlanta, Charlotte, Chicago, Dallas, Cincinnati and St. Louis, has brought a great response,” he adds. “We are easy to get to and have so much in just music and family attractions alone. It’s really given Tennessee a huge bounce back.”

Still, there are some clouds on the horizon. And whether they are storms remains to be seen.

For one, the hospitality industry continues to suffer staffing issues, with many workers finding new employment during the pandemic. There also are safety concerns, as the surges in Delta and Omicron variants of COVID-19 may give some travelers pause.

Ezell says his team, as well as their local and regional counterparts, are clear-eyed about these concerns and are doing what they can to work through them.

“These are national challenges, and we certainly feel them in Tennessee,” he continues. “Leisure and hospitality employers need workers. The good news is that we are seeing employers try to adjust as they can, either with higher salaries, or different shifts and hours, so they can make their business model work and still provide great customer service.

“We also offered our first worker recruitment program, Come Work, Come Play, through the Department of Workforce and Labor, which got information into the market about why Tennessee is a great place to work and live, so that we could bring more people here to fill these and many other jobs.”

On the safety front, he points out that sanitizer stations, distancing protocols and other measures are visible signs that attractions and other businesses take visitor wellness seriously. He also says that many COVID protocols, such as timed entry, are likely to stay as they also help with traffic flow and operations.

“People are choosing Tennessee for our outdoor resources, sure, because they cannot be around a lot of other people,” he says. “But where there are large groups, we are making sure the messaging is out there for people to know they can get sanitizer, wear their masks, do what they want to do to be comfortable and safe and still experience a great attractions or event.”

And despite whatever uncertainties 2022 may hold, it also will see the debut of major new draws that will be tourism draws for years to come.

The first is some additions to the state’s 12 stops along the U.S. Civil Rights Trail, which should be announced soon.

The second is the creation of the Bill Dance Signature Lakes initiative, a $15 million investment in making improvements above and below the water line at 18 lakes across the state. A collaboration between the tourism department, the Tennessee Wildlife Resources Agency and Tennessee State Parks, it’s designed to tap into the state’s estimated 1.7 million fishing enthusiasts, as well as lure in anglers from elsewhere, Ezell says.

“The program touches 39 counties, including 22 at-risk or economically distressed counties, so it’s an important step in helping them gain new revenue streams by bringing in more visitors,” he explains. “Fishing generates $1.2 billion in economic impact annually and supports more than 7,000 jobs across the state, so this program can provide many different benefits over time.”

The tourism and hospitality industry are used to combating the unexpected. In Tennessee, its ability to do so has been thoroughly tested in the last two years. The unprecedented nature of a full shutdown and a reopening that happened in fits and starts provided challenges and lessons, and has left the industry stronger, Ezell says.

“The events we have partnered with across the state this year have shown how much people want our visitor-related products,” he notes. “People want to come to Tennessee. If we do a good job marketing the state, and make sure they know they can have a safe, fun experience, then we can get back to the record-breaking numbers we had a few years ago, and then pass them.”

Chattanooga looks to expand

After hunkering down in 2020 and operating as a support and information resource for its partners in the restaurant, lodging and attractions sectors, the Chattanooga Tourism Co. also began to focus on leisure travel in 2021. And like its Knoxville colleagues, it also saw brisk movement, says Barry White, president and CEO.

“We spent a lot of time doing daily calls, sharing information and data, to help our partners during the worst of it, in early 2020,” White says. “Then by the fall, we slowly started with a return-to-travel message that had a strong safety component. We invested heavily in leisure marketing because we have a very strong drive market.

“We really did put all our eggs into that basket and reached out a little further than we normally did, and it was really successful.”

That model carried over into 2021, when Chattanooga saw a 25% increase in driver visitation from people who lived more than 250 miles away. Seeing that people wanted to travel, would venture further from home and would spend more, White and his team met the moment with even more targeted marketing.

“That pent-up demand was real, so we promoted our outdoor assets, which really played well into a safety message,” he continues. “We are very fortunate to have those natural assets, and so we led with those all through fall of 2020 and into spring and summer of this year. At the same time, we also began working to get our convention meetings and groups, as well as sporting events, coming back in.

“We are finishing 2021 strong, hosting high school football and girls soccer championships for the state, so that is rebounding, as well. Business travel is still lagging, though, and so we’ll be focusing on that in 2022.”

Those efforts will be helped by meetings that were postponed, rather than fully canceled, White says, noting that “we’re dropping in some repeat bookings and postponed ones, and we’re also out on the road looking for new business.

“The business-travel market isn’t 100% back, but we are seeing that people want to have their meetings, even if they must do them a little bit differently. I think during 2022 we’ll be back up to full speed on convention, meeting and sports marketing, so we’ll see results later in 2022 and going into 2023.”

The city also is seeing strong room-occupancy rates, boding well for a hospitality sector that took months of hits in 2020. Right now, those are around where they were in 2019, White says, which is allowing for room rates to tick upward. Visitors also are willing to spend more on dining, attractions and other activities alongside their hotel room, which boosts the leisure economy when its businesses are struggling with staffing and other shortages.

“Our restaurants and other hospitality businesses have suffered like everyone else from labor shortages, so they need the business coming in to help them meet that challenge,” he continues. “They are adapting to the situation as best they can, as are attractions like Ruby Falls, by not pushing the volume they would normally push. They are seeing that if they get more spending per visitor they don’t need the volume, and that helps with staffing.”

The new year will see the continuation of collaborative efforts across the board. Planning and strategy sessions are, and will continue to be, joined up with cooperative advertising campaigns with large destinations such as the Tennessee Aquarium, allowing both the city and the attraction to get their message into more communities. And the “bread and butter” drive market will still be a huge focus, White says.

“We’re layering in efforts to push meetings, conventions, sporting events, but we worked with the state as they broadened their reach beyond that 250-mile drive market, and that was very successful,” he says. “When they stretch their dollars, it stretches ours and helps us promote in new regions, and we are very appreciative of that.”

Nashville reenters stage

The state’s capital is a major tourism anchor, relying on a mix of regional, national and international travel. When it lost two out of three of those groups, it pivoted to drive markets.

Like the state’s other large cities, it found a winning formular there as well, says Butch Spyridon, president and chief executive officer of the Nashville Convention & Visitors Corp.

“So much was out of our control, but I would say we navigated, saved, rebooked and recovered as well or better than the majority of destinations, out there,” Spyridon says. “Our leisure recovery was faster and stronger than we’d imagined it would be. Meetings are still hit or miss, but there were a number of times where those we held had attendance that exceeded expectations.

“We held on to most of the fall in 2020, and we came out pretty well going into 2021 with postponed ones.”

A big disappointment was international travel not returning during the usually busy midyear months. That, coupled with labor shortages and other roadblocks, held visitation in check. Even so, hotel occupancy numbers are climbing, and Spyridon says he’s hoping for continued growth in 2022.

“The Delta variant held up the borders reopening for visitors, and that was an unexpected disappointment,” he explains. “We’ll have to see what happens now with what’s going on. And we’ve also seen a big challenge to hotels in terms of labor. Even so, they have gotten close to their 2019 performance levels in the last several months. That has been crammed into Thursday through Saturday, though; the early part of the week is still tough.

“We’ve seen wages go up pretty dramatically, so maybe soon they won’t lose employees, or lose them to each other. Right now, we’re seeing hourly salaries of between $17 and $20, and more benefits. Our hospitality-worker was tight before, so that’s going to be an issue for a while longer.”

Nashville’s ever-evolving skyline continues to see construction cranes, another good sign for hospitality, restaurants and attractions. The international issues with supply chain and goods delivery are slowing new builds and renovations, however, which is also hampering the hospitality comeback.

“We’ve seen all kinds of supply-chain stories, from big to small,” Spyridon says. “The Jack Daniels folks were having trouble getting glass, so that meant a holdup getting their product into restaurants, bars and hotels. People are missing certain products, and that’s holding things up.

“We’re not seeing the dramatic issues that the automotive and other industries are having, at least not yet, but we’re certainly not immune.”

A “normal” 2022 would be one full of big conventions and bustling hotels around major events such as the CMA Fest and more. Some of that may happen, some may not — it’s just too soon to tell, Spyridon says, adding that plans are being made for all contingencies.

“Next year looks as good as we could hope for in terms of what has, and hasn’t happened,” he says. “We don’t see a lot of cancellations, and air service is picking up. New hotels are opening. We’re challenged by the unknown. What’s happening in Europe now with the new COVID variant has us all paying attention. If countries lock down, that could affect the international travel that was just resuming. We want to be optimistic, and to operate as best we can, but we’ve learned to pivot quickly. Anything can happen.

“We have good forecasts, good bookings. We’re committed to keeping our heads down and filling our pipeline with conventions and other events that will bring in tourists and business travelers. If our meetings numbers hold, 2022 would exceed 2019 across the board in terms of average room rate, rooms sold, air traffic and event attendance.

“It’s a very positive outlook – just one that has a giant asterisk by it.”

Knoxville getting results

Looking back on 2021 has been a more pleasant experience than the previous year’s post-mortem for Kim Bumpas, president of Visit Knoxville. Looking ahead to 2022 also is cause for optimism.

“From an event perspective, we began coming back in February of this past year and never really stopped,” she says. “And then leisure travel kicked in, and in the summer we really capitalized on our outdoor adventure offerings. People who wanted to travel were saying they wanted more drivable destinations, with lots of outdoor activities, so we marketed to that.”

When the shutdown happened in March 2020, Visit Knoxville, which works with the city and county to promote local and regional visitation, also spent time focusing on helping event planners reschedule, rather than simply cancel, conventions and other large-scale activities.

“We got them to move their events into 2021, 2022 and 2023, so we stayed in their minds,” Bumpas explains. “We also remained front and center for those people in terms of individual travel. That started paying off when our tax collections rose in 2021.

“We saw our occupancy and daily rates go up, and in 2021 we not only beat 2020 but began closing in on 2019 numbers in May. After June, we really crushed them.

“We did that with leisure travelers because people were prepared to spend once they did travel. That meant our hotels got into a position when they were getting close to selling out on weekends. That meant they could be more aggressive in their midweek pricing and could grow their average daily rate anywhere from 30% to 40% on any given night.”

Bumpas is bullish on what 2022 and beyond will be like for Knoxville-area and East Tennessee tourism. That’s thanks to state efforts she says, as well as the groundwork being laid by her team and its partner organizations around the region.

“We’re going to be capitalizing off the leisure travel we’ve built, so more people see us as a premier getaway destination,” she continues. “People are coming here to have fun, and they are staying for two or three nights vs. just one or two. And we moved between 100 to 150 events from 2020 and 2021 to 2022 through 2024, so those people are coming.

“Those, on top of this phenomenal leisure travel base, means we’ll see that daily room rate and overall occupancy number go up. We had our highest hotel-motel tax collections in history in July and August, with more than $1 million each month. We also have some new hotels coming online, and that’s only going to help.”

Marketing strategies will contain the travel-safe component, but that may be dialed back so that various campaigns resume pre-pandemic efforts. That said, should a surge create safety concerns, all those messages are easily deployed again, Bumpas points out.

“We have all that in our toolbox, so we know how to talk about being a drivable destination in a lot of ways,” she says. “We know how to speak to the visitors in terms of not just what they want to see and do, but also what concerns they have.”

That readiness is essential, she says, because even local experts in tourism and hospitality can’t predict how an unprecedented situation will end.

“My crystal ball broke in early 2020,” Bumpas admits. “I thought we would see a phased rise in event and leisure travel and instead we got a light-switch kind of effect last February. A lot of our events came right back then, and we dealt with masks, distancing and other protocols they wanted to have in place. Sporting events came back the quickest, and then meetings and conventions where people could drive to us.

“Air travel is beginning to come back, and so we’re hoping to build on all that we’ve done and keep this momentum going. It’s a very positive story coming out of Knoxville right now.”