Kamaole Beach Park in Kihei, Hawaii, on Aug. 2, 2020. Photographer: Mia Shimabuku/Bloomberg

Day Trips Instead of Destinations: Tourist Hot Spots Brace for Lean Years

By Danielle Moran, Andre Tartar, Amanda Albright and Christopher Cannon

August 5, 2020, 5:00 AM EDT

From California’s wine country to Colorado’s ski towns and Florida’s beaches, American cities that built their economies around tourists are being upended by Covid-19.

For many towns, day trippers are replacing free-spending vacationers. Social-distancing guidelines are crimping restaurant sales, and hotel stays have fallen dramatically. That’s eating into the tax revenue that funds schools and police, prompting local officials to slash budgets and furlough workers.

Bloomberg News collected data on more than 50 of the most tourism-reliant U.S. towns and cities to assess the scope of the pandemic’s economic blow. The data, as well as interviews with mayors, budget directors and other government officials, offer another view of what’s at stake as lawmakers in Washington debate whether to provide more aid to coronavirus-battered states and cities.

At least one out of every six jobs in these 53 tourist towns is in a related industry, such as hotels or restaurants. For some smaller ski resort areas, that share rises above 40%. Fewer tourists and their dollars means fewer jobs and strained city budgets.

Sources: Bureau of Labor Statistics and Bloomberg reporting

Outside a few stretches of Florida coastline, most tourist towns aren’t yet back to their usual levels of summer activity, according to mobile-phone location data. Foot traffic is especially down in Hawaii, gambling destinations like Las Vegas as well as in the country’s theme park capital, Orlando. The Disney parks started reopening on July 11.

Sources: SafeGraph and Bloomberg reporting

There are at least 75% fewer Airbnb bookings in the top Hawaiian destinations, and almost a 50% decrease in Napa wine country, with several other California cities also lagging. Still, some places like Sevierville, Tennessee, near the Great Smoky Mountains National Park, have seen increased activity with about 60 additional average nightly bookings in 2020 compared to 2019, up 23%.

Sources: AllTheRooms Analytics and Bloomberg reporting

“We are at a crossroads,” said Bret Prebula, finance director for Napa, California. “If this continues to go in the bad way that it is—I have a bad feeling that the fall becomes a really telling time for Napa on whether this will have a long-term systemic impact on us.”

If enough visitors don’t return and towns like Napa don’t get a lifeline, they may be forced to deepen their spending cuts, potentially worsening a U.S. economy that’s struggling to rebound. Cities are facing $360 billion of revenue losses through 2022, according to the National League of Cities, and Congress is mired in a partisan standoff over the next round of stimulus.

In Napa, a region lush of vineyards has seen a decline in visitors. Photo: David Paul Morris/Bloomberg — In Napa, a region lush with vineyards has seen a decline in visitors. Photo: David Paul Morris/Bloomberg

More far-flung destinations like Hawaii’s beaches, and the ski towns of Vail, Colorado, and Park City, Utah, where visitors often must fly to, are especially impacted during the contagious outbreak.

A New Jersey family’s travel plans illustrate the problem. Arnel Kernaghan had planned a trip to Italy this month as a getaway before her niece’s wedding. But as the virus spread through the country earlier this year, they thought better of it and shifted their plans to a small resort on Lake Tahoe. Then the pandemic erupted in the U.S., prompting them to look for a place within driving distance. They settled on Long Beach Island, just down the Garden State Parkway on the Jersey Shore.

Such decisions are playing out across the nation. Here’s how four tourist towns are handling them.

Sources: Bureau of Labor Statistics, Bloomberg reporting and Womply

In Napa, whose wineries help to attract nearly 4 million visitors annually to the region, the city is projecting to lose a fifth of its revenue. It implemented a hiring freeze leaving dozens of vacancies, halted infrastructure projects and cut employee trainings and contracts, said Prebula, the finance director.

Napa’s revenue for the fiscal year started July 1 is about $20.7 million lower than a previous projection. “We need a revenue transplant, essentially,” Prebula said.

Before the pandemic, about 45% of the city’s revenue was generated from hotel or sales taxes, much of which comes from restaurants, which have seen sales plunge. In the last week of July, average daily credit-card spending at a sample of Napa restaurants and wineries was down more than 50% on a per-location basis compared to 2019, according to small-business transaction data compiled by software and business-services provider Womply.

“McDonald’s knows how to do takeout,” said Prebula, who is worried about the very existence of the area’s restaurants, many of which are small businesses. “But when you spend $250 on a meal with wine, you don’t make money on to-go orders.”

Sources: Bureau of Labor Statistics, Bloomberg reporting and SafeGraph

Scientists have warned the coronavirus could worsen in the fall and during flu season. That’s bad news for winter-sports havens like Park City, Utah, or Vail, Colorado, which attract hundreds of thousands of visitors each year. Vail has instituted the fifth and highest level of its recession plan, aptly named “Crisis,” projecting a more than 20% decrease in revenue. Ski season will look different this year, but it could be worse in the unlikely scenario the mountain doesn’t reopen at all, said Kathleen Halloran, Vail’s finance director.

“I wish everything was going back to normal in November and December. But that’s not just going to happen,” she said.

Park City, home to the largest U.S. ski resort, faces a potential economic hit if its signature event, the Sundance Film Festival, is scaled back from its traditional Hollywood glamour. In just 10 days, the festival accounts for about 10% of the town’s annual economy, according to Mayor Andy Beerman. But this year, the festival is planning to expand beyond Park City to accommodate social distancing and protect attendees.

The city is trying to find creative ways to ease the burden on businesses, like closing down Main Street once a week so that restaurants can expand their outdoor dining options.

“We are trying to figure out how to keep our economy on life support,” he said.

Sources: Bureau of Labor Statistics, Bloomberg reporting, FlightAware and Flightradar24

Across the Pacific, the county of Kauai has seen one in five of its residents become unemployed during the pandemic as hotels closed and the tourism industry dried up. Derek S.K. Kawakami, the county mayor, said the empty beaches are a daily reminder of the estimated 30,000 fewer people on the island every day.

“This whole thing is a big wakeup call,” he said. Kauai needs to use this as an opportunity to diversify its economy away from tourism, Kawakami said. The county has frozen hiring and suspended infrastructure projects.

“We’ve been through hurricanes, we’ve been through flooding events, we’ve been through economic downturns,” Kawakami said. “This is unique. When a natural disaster happens, it occurs quickly then we have to rebuild. This is an ongoing marathon.”

A Hawaii state forecast found that the visitor industry won’t begin its slow recovery until September and visitor arrivals won’t rebound to 2019 levels until 2025. Visitor arrivals to Hawaii were around 700 to 900 people a day in early July, compared to about 30,000 to 35,000 pre-pandemic, according to a securities filing.

Sources: Bureau of Labor Statistics, Bloomberg reporting, New Jersey Turnpike Authority and AllTheRooms Analytics

Arnel Kernaghan, who had to scale down her family’s European plans to a Jersey Shore road trip, isn’t alone. East Coast beaches are in many cases seeing increases in foot traffic over the summer months, according to cell phone data. That’s good news for the local economy—but it also presents issues given crowds can accelerate the spread of Covid-19.

From the window of his house, Frank Donato, the financial management director of Ocean City, New Jersey, can see the Saturday traffic lined up on the main artery into his town. He says it looks almost like every other summer since he was five years old—a good sign for next year’s budget.

Most of the town’s money comes from property taxes, a stabilizing factor as home values don’t fluctuate immediately during a downturn. One revenue stream, the sale of beach tags that allow daily and seasonal access to Ocean City’s beaches, was down about $600,000 at the start of the season when uncertainty around when the beaches would reopen limited sales. That came roaring back in June, mostly with day-trippers looking for something to do, he said. Now, sales are off only about $30,000, he estimates.

Ocean City hasn’t had to implement any layoffs, furloughs or service cuts and Donato expects revenue to be down about 1% from lower tag sales and money the city gets from a sports complex.

Locals are keeping the beaches and boardwalks of New Jersey busy amid travel restrictions. Photo: Gabby Jones/Bloomberg

Even as beach vacationers start to come back, cities are still struggling from the drop-off in revenue from the stay-at-home orders, said Derek Brockbank, executive director of the American Shore and Beach Preservation Association. “All of that dried up completely this spring,” Brockbank said.

Now, months into the pandemic, beaches are seeing “phenomenal” turnout, raising public health risks, he said. But cities’ fiscal constraints have made it difficult to staff positions like lifeguards and meet the increased demand for cleaning and sanitizing, he said.

While road trips are softening the blow for places like Ocean City, the recovery for air travel appears further off. Destination Analysts, a travel market research company, found that 18% of respondents in a survey of U.S. travelers said they may take a road trip in August, but 30% of those surveyed said they wouldn’t get on a plane until later in 2021.

Randy Wright, finance director of North Myrtle Beach, South Carolina, said he’s hoping Congress considers small cities like his in the next round of stimulus. Because of its size, North Myrtle Beach wasn’t eligible for direct support from the Cares Act to cover public health costs, but the city is still contending with rising cases of the virus.

And Wright considers his city, which had a strong financial position going into the pandemic, one of the lucky ones. “Some of the smaller towns, they won’t survive, no way.”

With assistance from Emmy Lucas

Editors: Elizabeth Campbell and Alex Tribou

Lead photos: Vacation destinations such as Maui, Hawaii; Napa, California; Ocean City, New Jersey; Park City, Utah; and Panama City Beach, Florida have seen varying amounts of tourists this summer. Photos: (clockwise from top left) Mia Shimabuku, David Paul Morris, Gabby Jones, Kim Raff and Aileen Perilla, all for Bloomberg.

Methodology: This story looks at the metropolitan statistical areas that are among the 50 with the highest workforce share across 60 tourism-related occupations and where an aggregate measure of tourism-related establishments, jobs and taxable wages was above the national average for either the 4Q 2018-1Q 2019 winter season or the 2Q 2019-3Q 2019 summer season. Places without complete data, like the area around Cape Cod, were excluded from the list. The story also looks at the 10 micropolitan statistical areas with the highest share of employment in tourism-related industries.

Labor force and population statistics are the latest available from the Bureau of Labor Statistics and the Census Bureau. All additional data and reporting cited in the story are for the namesake city or the most populated city in each metropolitan or micropolitan area; based on reporting, Panama City Beach, Florida was used instead of neighboring Panama City.

Change in foot traffic data is based on the 7-day moving average of mobile phones observed, normalized for daily fluctuations in the total number of detected devices.

Change in average Airbnb bookings per night is calculated based on a 7-day moving average.

Change in average credit-card revenue per Napa restaurant or winery is calculated based on a 7-day moving average.

The population and labor-force share data shown for the Park City and Kauai county breakouts are for the Summit Park and Kapaa micropolitan statistical areas, respectively. Flights into Kauai’s Lihue airport from the continental U.S. include any logged by either FlightAware or Flightradar24, with any that appear in both datasets counted only once.