Tourism in Tennessee boomed, then came 2020
Hamilton County banked its fifth consecutive billiondollar tourism year in 2019, and that would normally be unambiguously good news — but this year hits a little different.
“It’s great news,” said Barry White, the CEO of the Chattanooga Tourism Co. “But we also have to talk about where we are right now.”
The year had a promising start, but by the time it’s over the 2020 data will likely show a blow to the local tourism scene of about 45%, White estimated.
“January and February were fairly strong, outpacing 2019,” he said. “All of that changed, obviously, in March, and changed very rapidly.”
The story was similar across the state. Tennessee tourism set records in 2019, with $23 billion in economic impact, capping a decade of growth.
“Tennessee is a world-renowned destination, and I look forward to the time when we can gather together again at our festivals, sporting events and more,” Gov. Bill Lee said in a statement announcing the 2019 tourism results.
Tourism is the state’s second-largest industry, behind only agriculture. In April 2019, 346,500 people worked in hospitality jobs, according to the Tennessee Department of Labor and Workforce Development. In April of 2020, during the worst of the unemployment crisis, that number fell 44% to 194,100, according to department.
The U.S. Travel Association predicts the travel economy in Tennessee could see a 34% to 45% decline in 2020.
“I wish we could say we were prepared for this,” White said. “We were coming off a fantastic 2019.”
As the coronavirus shut down businesses and schools and halted travel in March and April, hotel occupancy plummeted, events fell off calendars and jobs evaporated. About one-third of the 30,000 hospitality jobs in the Chattanooga region went away in the first several weeks of the crisis, though roughly 8,000 have come back, White said.
The Chattanooga area has also seen 134 large events cancel this year, taking more than $110 million in economic impact with them, White said.
In April, 2,500 people boarded planes at the Chattanooga Metropolitan Airport rather than the typical 40,000 to 50,000.
“Our revenues immediately dropped 90%,” said Terry Hart, president and CEO of the Chattanooga Metropolitan Airport, during a Chattanooga Area Chamber of Commerce virtual forum on Wednesday. “The most challenging thing is not knowing how long the storm is going to last.”
Business travel, which had been about 70% of traffic, has all but disappeared, he said. There has been a slight bounce in passengers since the depths of the crisis, Hart said, but it’s cold comfort.
“We saw a 65% increase from June to July, but the total number in July was around 14,500 enplanements,” he said. “That’s a big drop from July of last year with 50,000 enplanements.”
The hotel occupancy story locally is similar, with Hamilton County doing better than the state and the nation, but still nowhere near normal levels, White said. Hotel occupancy this year in Hamilton County is at 50%, while Tennessee is at 42% and the U.S. is at 44%, he said.
The Chattanooga area has three big tourism seasons: Spring break, and the summer and fall travel seasons. Spring break didn’t happen — the pandemic shut everything down at the moment that season was kicking off. But the summer travel season has been a little better, largely because Chattanooga attracts road-trippers, White said.
“The summer has been better than we had forecast,” White said. “The dependency on those leisure visitors driving in will be what carried us through this.”
But there’s no sign yet of a return to anything like normalcy, and the recovery from this crisis will be years-long, White said.
“We’ve lost businesses, we’ve had some closings, attractions are at limited capacities,” he said.
It will also take years for the airline industry to resemble anything like 2019, Hart said.
“The airlines have all started to scale back, they are starting to park a lot of fleets,” he said. “When it comes back, they’re going to be a lot smaller, there’s going to be a lot less options to choose from.”