When the tourists and the conventions don’t come
Early in the century, the David L. Lawrence Convention Center was constructed with “Field of Dreams” in mind — build it and they will come.
But this could be the year they don’t come.
The COVID-19 pandemic has laid waste to the travel industry — and the region’s tourism and convention trade has been no exception. No one is coming to Pittsburgh these days to attend a convention.
Numbers tell the sad story. To date this year, 216 business or sporting events scheduled to take place in Pittsburgh have been postponed or canceled. They range from the Pittsburgh Marathon to the furries, whose annual July pilgrimage to the Steel City for Anthrocon has been waylaid by the virus. They won’t be back until next year.
With the cancellations and postponements, the region has lost a whopping $106.6 million in direct spending from visitors, according to VisitPittsburgh estimates.
Many events booked through September or October have vanished. One still on the books is the American Numismatic Association World’s Fair of Money convention, scheduled for early August.
“At this point, they’re still trying to move forward,” said Jerad Bachar, VisitPittsburgh president and CEO.
But even those efforts could be complicated by another factor: the state’s “yellow phase” ban on gatherings of more than 25 people. If those kinds of limits are not greatly expanded by August, neither the World’s Fair of Money, which draws thousands, or other big conventions could be held.
“We just have no idea what the future holds when it comes to government regulations,” Mr. Bachar said.
The COVID-19 pandemic and accompanying shutdowns have devastated many segments of the economy, from bars and restaurants to major corporate players.
On the travel side, one of those hit the hardest has been hotels.
In the 10 weeks through May 23, hotels in Allegheny County recorded 720,000 fewer room nights compared to the same period last year.
That equates to about $100.5 million in room revenue, which means the county has lost $7 million from its 7% hotel tax. In state and local taxes combined, the losses total about $14 million.
For VisitPittsburgh, the loss of hotel tax revenue — a prime funding source — has been particularly devastating. The agency has had to furlough about 29 people, or 54% of its staff. It is still paying the health care of those employees, who are expected to return when conditions improve.
“We need to look out for these individuals and their families,” Mr. Bachar said. “It’s absolutely essential that they have that [health care] benefit, so we will continue that.”
For the week of May 17, hotel occupancy in Allegheny County stood at a paltry 19.6%. The good news? That’s higher than the low of 11.2% recorded so far during the pandemic.
But it’s still far off the normal 74.5% for this time of year.
Downtown, hotel occupancy was even lower — at 9% for the week of May 17. That compares to a normal of 78.8% during this time.
With few customers, about 15 hotels have temporarily closed in the county, many of them Downtown,
Mr. Bachar said.
The local situation is simply a microcosm of the crushing blow that COVID19 has delivered to the travel industry nationally.
According to the U.S. Travel Association, travel industry losses will result in a gross domestic product hit of $1.2 trillion nationally this year. Lost tax revenue from travel declines are expected to total an estimated $80 billion.
And while travel as of
May 16 appeared to be on bit of a rebound as restrictions are starting to ease, it still was down 86% from last year’s levels.
In Pennsylvania, weekly travel spending between March 28 and May 16 has been down anywhere from $625 million to $695 million compared to the same weeks last year, with the average at $670 million.
With so many conventions and trade shows postponing or canceling, the 1.5million-square-foot David L. Lawrence Convention Center “has been basically inactive for the most part,” Mr. Bachar said.
Even when shows start to return, they may do so in ways that take into account the realities of COVID-19 crisis. That may mean smaller in-person gatherings combined with virtual attendance, Mr. Bachar said.
“I think that’s what we’re going to see for the rest of this year, for sure,” he said.
There also may be changes at the convention center itself, with larger rooms being used to distance people and stringent health and safety protocols in place to prevent the spread of the virus.
VisitPittsburgh is focusing its strategy on local and regional travel, targeting visitors who are within a two-hour drive of the Steel City. It hopes to sell them on some of the city’s outdoor assets first and then other attractions as more open for business.
“We need to find opportunities where we can in the short term,” Mr. Bachar said.
Despite the collapse of travel and the convention trade over the last few months, Mr. Bachar remains optimistic.
“We will rebuild. We will come back. The tourism industry is very resilient,” he said.
“We’re going to find our way back. People still want to travel. People still want to experience different places. We’re going to experience normal consumer behaviors. It’s just going to take us a little time to get there.”