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Keeping ’em
coming
Tourism
hurt by terrorism and snipers, but location may make
the difference
by
Rob Morano
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to enlarge |
Kat
Imhoff has a problem, but it’s one her colleagues
at tourist attractions around Virginia would love to
share. The chief operating officer of Monticello faces
a flood of visitors this month as Jefferson’s estate
launches a year-long celebration of the 200th anniversary
of the Lewis & Clark expedition. As Monticello’s
first major new exhibit since 1993 and the focus of
national attention, Lewis & Clark could double the
site’s half-million annual visitors.
The
problem is, where will they all park? Six satellite
parking lots have been set up for the visitors, who
start arriving Jan. 14 for the five-day kickoff. No
one knows yet if that will be enough space. It’s
a “logistical nightmare,” adds Wayne Mogielnicki,
director of communications for Monticello. “For
2003, we’ll be Lewis & Clark headquarters.”
And
not a moment too soon. Like much of the rest of the
Virginia tourism industry, Monticello has been tested
since the terrorist attacks of Sept. 11. Attendance
in 2001 was down 4 percent from 2000 and down another
2 percent through the end of November 2002 — relatively
small losses compared to other states. War in Afghanistan,
a weak economy and fears about the future conspired
to keep visitors away from much of Virginia last year
— as did the sniper that terrorized the region
in October.
But
for Imhoff and others, the state’s rich historical
attractions, natural beauty and location a road trip
away from major population centers should help its tourism
industry rebound. “What I see is a continuation
of the post-9/11 environment, and that’s more car
travel and the traditional day and weekend trips where
you just load up the kids in the car and go,” says
Nancy McGehee, assistant professor of tourism at Virginia
Tech. The Old Dominion might also hold particular sentimental
appeal for Americans looking for inspiration in overcoming
adversity. Says Imhoff: “We’re being confronted
with what it means to be a democracy. What better time
to come to Virginia?”
The
answer could depend on the economy and not just in the
Charlottesville area, where Monticello contributes nearly
$50 million a year. Tourism is a bigger business in
Virginia — and the nation and world — than
most people realize. It’s the globe’s No.
1 industry, according to the Madrid-based World Tourism
Organization, and one of the fastest-growing. Global
spending on tourism in 1990 topped $263 billion. Even
during the Persian Gulf War and recession year of 1991,
it grew 3 percent, and 14 percent the following year.
But
in 2001, tourism spending fell for the first time in
decades — down 2.6 percent from
$476 billion in 2000, and was expected to be flat for
2002. According to the Travel Industry Association of
America, the U.S. was among the hardest-hit countries
last year, with international visitor revenue falling
12 percent and not expected to reach the level of 2000
again until 2004. “Sept. 11 changed everything,”
says the association's analyst Mike Pina. “It’s
thrown a whole new dynamic into the mix. When people
see planes fly into buildings, that’s not something
you get over very quickly.”
If
ever. Thanks to fears of war, terrorism and a faltering
economy, the travel industry association's Traveler
Sentiment Index fell 5 percent in the fourth quarter
of 2002 to an all-time low. Virginia stands to suffer.
The state ranks 10th nationally in traveler spending,
and tourism occupies 211,000 workers, making it the
third-largest employer (behind business services and
health care) and the third-largest retailing sector
(behind car dealerships and grocery stores), according
to the Virginia Employment Commission.
While
traveler spending in Virginia grew in 1991 and 1992
despite the recession and Persian Gulf War, the events
of September 11 and afterward saw it drop from $13.1
billion in 2000 to $12.9 billion in 2001. It was the
first decline in the 25 years the commonwealth has measured
spending, according to the Virginia Tourism Corp.
Not
helping matters are the state budget cuts and other
challenges. The state’s tourism agency may not
be in much of a position to change that in 2003, when
it faces an all-but-certain slash in funding for advertising
and promotions. It already has cut a department that
helped localities market individual attractions and
events, and has reduced or eliminated cruise ship and
golf promotions as well as travel writer tours and trade
shows. The agency also has been without a president
since Gayle Morgan Vail resigned in March. Rita McClenny,
director of the Virginia Film Office, has been serving
as acting president since then, and Gov. Mark Warner
was still interviewing candidates in early December.
While
much of the state’s tourism business has slowly
begun to recover, Northern Virginia continued to suffer
throughout 2002. “We’ve had a horrendous year,
probably the worst since World War II,” says Jim
Rees, executive director of Mount Vernon in Alexandria.
He projected attendance in 2002 would be down 25 percent
from its high of 1.1 million in 2000, thanks to the
terrorist and sniper attacks that canceled many school
group tours — a third of Mount Vernon’s visitors.
“The vast majority of our visitors come from that
pool of 20 million a year who come to Washington as
a destination. When that 20 goes down to 12 [million],
that really kicks us in the pants.”
Both
the region’s major airports — Dulles International
Airport and Ronald Reagan Washington National Airport
— have seen a drop in the numbers of passengers.
But Rees is hopeful that a new convention center and
World War II memorial in Washington will spark a turnaround
this year. “Long term, I’m optimistic. We
can only hope nothing else happens and there’s
some sense of closure at some point.”
With
Osama Bin Laden and war with Iraq still a possibility,
that could be a long time coming. “I think there
is a far greater sense of insecurity now,” says
Martha Steger, director of public relations for the
Virginia Tourism Corp. Danny Mitchell, executive vice
president of the Virginia Hospitality and Travel Association,
dreads any attack that could produce the kind of widespread
fear created by the recent sniper shootings; five of
the 13 shootings happened in Virginia. “That’s
the kind of thing that paralyzes our industry,”
he says. Mitchell
says that a second war in Iraq or a worsening economy
could also push tourism back over the edge. “You
can’t say, ‘Hey, come watch the war on CNN
here in our luxurious hotel rooms.’ It doesn’t
even have to be an actual war or an actual recession.
It can just be the mention of one. There’s a natural
tendency not to spend money.”
Like
Northern Virginia, Williamsburg also has also struggled
— its hotel occupancy rose less than 1 percent
last year. Competition from Florida’s Orlando-area
attractions hurt: “They were way off in late 2001
and early 2002 because of fewer international visitors,
and they started marketing in our traditional Mid-Atlantic
and Northeast market. We really went head to head with
them. But their marketing budgets are in the hundreds
of millions of dollars, and that really hurt us,”
says Dave Schulte, executive director of the Williamsburg
Area Convention and Visitors Bureau. Colonial Williamsburg’s
attendance dropped 8 percent in 2002, down from 931,000
visitors in 2001. If the industry does turn around it
will be a gradual change, says Brad Garner of Smith
Travel Research of Hendersonville, Tenn. “We think
’03 is poised to be OK to good. But I think most
people are waiting for some kind of switch to go on,
and it’s not going to be that way.”
One
exception to the downward trend is Hampton Roads. Its
hotel occupancy rates are up 6 percent from 2000. And
thanks to a banner summer season, revenue per available
room was up a staggering 12 percent (see chart). “The
tourist industry here is in a mini-boom,” says
Gil Yochum, chairman of the economics department at
Old Dominion University and head of its Economic Forecasting
Project. “Third-quarter 2002 tourism revenue was
up 9 percent. You’ve got problems in Northern Virginia
but here it’s amazing.”
One
explanation may be a recent arrival at Norfolk International
Airport. Southwest Airlines, known for its cheap fares,
began flying to Norfolk a month after the September
11 attacks which led to an 18 percent increase in passenger
volume through October 2002. “We could have had
a 20 percent or 30 percent boost if it hadn’t been
for [September 11],” says Charlie Braden, Norfolk
International’s director of market development.
But Yochum and other experts say the key to the region’s
recovery hasn’t been airplanes, but automobiles.
“It appears about 94 percent of our visitors arrive
by car. We’re within a day’s drive of an enormous
market and that’s had some very positive effects.”
Tourism
businesses in the rest of Virginia hope that same advantage
will help them as well. About 80 percent of the state’s
33 million annual visitors arrive by car. And more than
20 million people travel the Blue Ridge Parkway and
Skyline Drive each year, making them the largest tourist
attractions in the state by far. “If there is a
silver lining, 9/11 has kept people closer to home and
Virginia should reap those benefits,” says Mike
Olsen, professor of hospitality and tourism management
at Virginia Tech and executive editor of International
Journal of Hospitality Management. “All things
being equal, we can hope for some improvement in 2003.”
Low
gas prices have helped. The national average for a gallon
of regular unleaded was $1.44 in 2000 and $1.35 in 2001,
with 2002 expected to be at the low end of that range.
There’s no reason to think that will change much
in 2003, even with another Gulf War, says Randy Green,
manager of public relations for AAA Mid-Atlantic. “And
it doesn’t really matter where gas prices go in
terms of auto travel. Even if the price of gas were
50 cents higher, that’s only 20 bucks more for
a 1,000-mile trip in a car that gets 25 miles per gallon,”
he says. “Until it gets up above $2 or more, it’s
not going to impact the volume of auto travel.”
The
latest figures in fact show a 10 percent increase in
visitation at Virginia’s welcome centers. And recognizing
the importance of vehicle-borne visitors, the state
is trying to make driving through the Old Dominion more
pleasant. In May, the state began upgrading its 10 welcome
centers and 31 rest areas with an $8.1 million reconstruction
of the welcome center on I-85, a half-mile from the
North Carolina border. The new 17,500 square-foot facility
includes improved safety features, family-friendly restrooms
and recreation space, and a tourism center with staff,
tourism brochures and an interactive kiosk.
Also in 2002, travelers with cell phones along the 325-mile-long
I-81 corridor began dialing 511, a voice-activated service
that offers information on traffic, accident, road construction
and weather reports, as well as nearby dining, shopping,
lodging, gas and tourist attractions. After calling
511, travelers can even have the service dial local
motel or other business for them.
Still,
even car travel isn’t immune to fear. The Fredericksburg
region learned that lesson in October during the string
of sniper shootings. Two people were shot — one
at a gas station, the second in a store parking lot
— and one victim died.
“It
had a very dramatic effect on us,” says Karen Hedelt,
manager of Fredericksburg’s Office of Economic
Development and Tourism. Hotels emptied out and retail
sales dropped, as did attendance at the region’s
historic sites, which include Civil War battlefields
and a quaint downtown district. The number of casual
visits is still down about a third, she says. “It
was shaping up to be a good year, but it went straight
down the tubes.”
Return
to Virginia Business - January 2003
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