RI’s economy is highly dependent on tourism. How will it begin to move forward?
The monetary repercussions of COVID-19 have shown themselves inside the travel industry, and 2020 figures painted a depressing picture, with several of our local municipalities confronting more generous blows than others. Undeterred, Rhode Island is making moves to bounce back this summer season with new approaches to get people into the state. Here's where we stand now.
Newport's tourism industry has lost hundreds of millions of dollars due to COVID-19. The Newport Folk and Jazz Festivals, set to occur at Fort Adams last spring, were both cancelled.
An investigation conducted in 2018 discovered the two occasions accumulated more than $58 million in income; cash that wasn't produced for this past year. President and CEO of Discover Newport, Evan Smith, said the financial effects of COVID-19 are crushing, considering the tourism industry in the city brings in about $800 million every year.
Smith said the city underwent a huge hit when the St. Patrick's Day Parade was canceled in 2020. It's been a downward spiral from that point, with cancellations of the yearly Flower Show at the Newport Mansions and the U.S. Men's Senior Golf Tournament. According to Smith, the Newport County alone has the potential to lose $300 million this year.
RI Moving Forward
The choice has clear implications for the social scene in Rhode Island, however has definitely had a financial impact. According to The Providence Journal, "Lost labor is a common theme across the tourism industry. The Graduate Providence hotel, which closed in March and finally reopened last week, is now operating with about 30 staff members compared to the team of 160 it had at the start of the pandemic." The hope for financial improvement was short-lived when marches, shows, celebrations, weddings and other occasions that draw enormous groups were cancelled throughout 2020. Without the marquee occasions that attract tourists, those in the business experienced great losses this year as the impact swelled out to inns, cafes and retailers.
The distressing viewpoint is shared by the Providence Warwick Convention and Visitors Bureau, as the cancellation of 2020 events began at the Rhode Island Convention Center when it was transformed into a field medical clinic for COVID-19 patients in April 2020. "The losses incurred by occasions that were set to be held between March and November totaled $43 million", said Kristen Adamo, president and CEO of the Convention and Visitor's Bureau. While that number incorporates occasions that ought to be rescheduled, it will be at least a year, if not a few, until they occur as a result of the long lead time required for planning and organizing them.
During the downturn 10 years prior, as travelers out of state reduced, the number of guests to local beaches in Rhode Island grew, said Louise Bishop, president and CEO of the South County Tourism Council. She's depending on something comparative happening this late spring.
Tourism and travel to Block Island, which has had only one coronavirus case, is still restricted presently, but the New Shoreham Town Council is examining approaches to begin a progressive reviving for the mid-year after a crisis mandate passes on May 7. According to Commerce RI, the State of Rhode Island has worked with several businesses in order to permit the reopening of operations within parameters to prevent the spread of the virus. For businesses with the hotel and other hospitality sectors, it has been instructed that addendum be attached to any lease, rental agreement or deed. Under the addendum includes the receipt of required acknowledgement that the tenant, renter or purchaser of real estate to have immediately self-quarantined for 14 days.
Other sectors such as restaurants, entertainment and close-contact businesses have undergone restrictions to their operations for more than a year. However, these restrictions will soon be relaxed. Starting on May 7th, "businesses and venues will be allowed to operate at 80% capacity", Gov. Dan McKee said. This includes restaurants, retailers, offices, gyms, catered-event venues, houses of worship, funeral homes and barbers, hairdressers and other personal services. Additionally, Rhode Islanders will be able to roam outdoors without masks starting as soon as May 7. According to The Providence Journal, "By May 28, the start of Memorial Day weekend, businesses and houses of worship can return to pre-coronavirus capacities, Gov. Dan McKee said Thursday, although people will still have to stay 3 feet away from one another and wear masks indoors."
Opportunity for Real Estate Investors
The global pandemic has left no industry unaltered, opening opportunities for property investors. As with the previous economic and financial crisis, it is not unknown for property investors to take advantage of distressed market sectors. Some businesses within the hospitality sector like restaurants and hotels may be too tight on their cash flow and unable to recover, generating new opportunities for those looking to acquire distressed commercial assets. Enterprising entrepreneurs who have been able to manage the radical changes in the tourism industry may find deals that were previously unavailable to them suddenly opening up.
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