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Feb. 15, 2021 - Epoch Times
25:09
Can California’s Tourism Industry Recover from State Shutdowns? | Jay Burress
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We want to talk to you about tourism in California and especially in Anaheim.
With the pandemic, the impact has been really big on you guys.
Can you tell us what happened?
It's staggering.
When you look at not just our operation, but the small business owners from the restaurants to the even so the retail outlets, obviously the hotels, but also the suppliers and providers to those hotels and restaurants who that demand was not there anymore.
And is there any plans for opening up anytime soon?
So we've been scrambling, trying to put all these things in place, so not just that Sacramento and the governor will view those as safe to open up, but also the attendees who want, they want to go to a safe place and a clean place and a sanitization place.
That's in place now.
Now we're just waiting on the governor.
Do you think your industry has a voice or do you think other industries like tech, space, they have a much stronger voice than you guys do in Sacramento?
We've got a long way to go and I think this has shown us that We need to put more pressure on our advocacy efforts both in the state as well as within the country.
What do you recommend to the policy makers?
Talk to our industry.
Talk to the hotels and see exactly what they're doing so we can be safe and reopen the economy at the same time and that's hopefully where we're headed in the not too distant future.
Tourism in California declined in 2020 after the state shutdown.
My guest today is Jay Burris.
He's the CEO and President of Visit Anaheim.
Today he discusses the draw of tourism in California, the economic impact of the shutdowns, and the state's plan for reopening.
Welcome to California Insider.
Jay, it's great to have you on.
Welcome.
Thank you for the opportunity.
Good to be here.
We want to talk to you about tourism in California and especially in Anaheim.
This is a city that's getting impacted by the shutdowns.
The city has lost almost half of their revenue.
Is that true?
Well, the tourism, the hotel tax accounts for about half the revenue for the entire city.
In order to provide services and such.
So with the drop in tourism and the restrictions in place, revenue is not being generated.
And that means a lot of jobs and a lot of city services potentially.
And also Disney is being shut down.
Before we get into that, we want to talk to you about how tourism works in Anaheim.
Tourism is our number one industry in Anaheim and our job as Visit Anaheim is to promote, sell and market our destination as a visitor's destination.
Two people in the region first, followed by the state, followed by the western United States, followed by the entire U.S. and internationally.
to come to enjoy all the things that we have to offer, namely Disneyland.
So we work in partnership with Disneyland and other attractions and the hotels to promote our destination for people to come visit.
We also bring in the conventions and we book the actual conventions that come to town And a lot of people don't know Anaheim has the largest convention center on the west coast.
So it's a big convention town, big tourism town.
Obviously, most people in the world know of Disneyland, so it's a great opportunity for us to capitalize on that and bring people in here, which creates jobs, creates tax revenue, and creates so much more for people who live here.
And do people come because of Disneyland and then they will have conventions as a result of Disneyland being there?
Well, there's the leisure traveler who will come for Disneyland and maybe combine a trip to the beach or combine the other attractions, the other theme parks in the area.
In our view, using Anaheim as the hub to go see all these different attractions.
The conventioneers, many of them want to combine a family vacation with their attendants at a convention, so they will do that because Disneyland is here.
There are others who won't go to Disneyland at all and are more concentrated on their educational value of the convention or the facilities where they can have their convention or entertain their clients.
So, different types of people attending.
But you have the largest convention center because, why is that?
Is it because that people bring their, there's an opportunity to go to Disneyland as well and people come?
Absolutely, and it's a combination thereof, our location, our weather, but obviously the attractiveness of the area with Disneyland is a big part of that.
You know, you can have a great big building and some hotels.
That's not enough to draw people anymore.
You have to have attractions, restaurants, things to do and see while they're in town.
And that's very, very important.
But I don't think you'll find another city our size, with our population, that has a convention center of this size.
That just doesn't happen.
What is the value of these conventions to the city when people come for these trade shows?
Conventions mean so much.
The convention attendee, there's more economic impact because they spend more money, they might stay longer, and they're entertaining clients when they're here.
There's the expenses of exhibiting at a trade show, all that, the flights to come in.
It really drives a lot of the economy.
Where there's a lot of leisure travel, it's a lot of drive in market, spending lower rates, much more rate conscious.
So it's I wouldn't say one's more valuable than the other, but one has a larger economic impact.
Hotels are able to offer higher rates to the convention delegates and so forth.
So you really need to have a diversity of product and of visitor so that you can apply those different levels.
We've got everything from leisure to the amateur sports market to the association convention attendee to the corporate Convention attendee, all at different levels and price points.
So a good mixture of that, make sure you have a great diverse economy.
And now with the pandemic, after the pandemic, the impact has been really big on you guys.
Can you tell us what happened?
Sure.
I remember being in the convention center the first week of March when our second largest client was soon to start their convention in a couple of days.
They had to make a decision right then to cancel the entire show because of all the cancellations they were receiving from around the world because of the pandemic.
Following that, you started to see hotels close down, furlough all the staff employee.
Our own operation, we had to furlough 60% of our employees and lay off 60% and furlough the remaining 40%, and that was due to the Really, the lack of revenues that were coming in were funded by an assessment at the hotel rooms.
So with that being gone, our revenues dried up, and so did a lot of people's.
But that impact is just staggering when you look at not just our operation, but the small business owners from the restaurants to even the retail outlets, obviously the hotels, but also the suppliers and providers to those hotels and restaurants.
That demand was not there anymore.
So we went from about a 90% occupancy in our hotels to a mid-twenties.
And that is, we've never seen anything like that before.
And is there any plans for opening up anytime soon?
I understand that Disney's shut down.
And also the convention center is shut down as well.
Is that...?
Right.
We're hoping for some...
We've got guidelines in place that we've prepared for both opening up of theme parks and of convention centers and meetings.
And we've submitted those to Sacramento and to the governor's office for review.
But we still don't have any guidance from them.
We're still in the yellow tier for both conventions, or really for theme parks, and so we are waiting for that.
We're trying to move those into lower tiers, showing the protocols and guidelines that are in place now.
That we really rallied around the industry to develop things like there's a GBAC certification, which is a global bio-risk certification.
It's kind of a cleanliness, housekeeping seal of approval kind of a thing on buildings and facilities.
And we were the first building on the West Coast to receive that certification.
So we've been scrambling, trying to put all these things in place, so not just that Sacramento and the governor will view those as safe to open up, but also the attendees who want to go to a safe place and a clean place and a sanitization place.
So that's in place now.
Now we're just waiting on the governor.
Do you think you'll hear back anytime soon?
We hope so.
We know that lifting of the lockdown was a big assistance to a lot of our restaurants who have the outdoor dining.
Also some of the hotels that would allow now leisure travel when that was banned during the lockdown.
So hopefully little by little as we can keep the testing up, but also the vaccines are going up, the case numbers are going down, I think we're going to reach that happy point in the middle where we're going to be able to start to move tiers and move on up or to View a different system.
Maybe back to hospitalizations or whatever that looks like.
But I think that everyone is very aware and being very careful.
And we just think it's time to start to look at lifting some of those so that we can at least have a plan in place or a date in the future.
Is it spring?
Is it summer?
Whatever it is.
But without knowing that date, everyone's still in limbo.
And that can have severe lasting damage to not just Our industry, but our cities.
So what's been the damage so far on the restaurants and the hotels that you see in your community?
Well, without the ability to open with the restaurants, Outdoor dining has helped and everyone's been very creative with that.
We've had many restaurant owners who have just said, I'm not coming back.
I can't go through the shutdown.
I'm going to focus on my, maybe I have restaurants in other states.
I'm going to focus on those, but they're not coming back to Anaheim.
And that affects us in the long run because You have to have those restaurants and those attractive things to do and see when people come to conventions or come here on leisure.
So that's going to have a lasting effect.
We've also got hotels that have had to furlough or lay off the majority of their teams.
So it's not like just flipping a switch and everything is back in order.
They're going to have to try to recruit people back to come back to work.
Are they going to discontinue certain services forever, like room service or different Turn down services at hotels.
People may laugh at that or scoff at that.
That was a job for someone.
So that is going to have a lasting effect and that's disheartening.
Do you think people may not come back, your convention customers and people that are going to Disney, if you don't open at some point soon?
People will choose other locations versus...
Well, I think they are now because other states are more open than we are.
And people, there's a real pent-up demand for people to travel and to get out.
There's almost 50% of the people surveyed that we recently saw are...
People think that they will travel on a leisure trip between March and August of 2021.
So people are ready, but they want to feel safe, but they also want to know what they can do, what's going to be open when they get there.
So they're making other plans.
They're going to Nevada, Arizona, Texas, Florida.
And without being in that rotation, people may find they like something better.
California's always going to be a draw because of our just natural beauty, weather, and Things to do, but if you have options, people want to take their family vacation and their leisure trip, and that's what they're going to do.
Do you see the impact on numbers of when people travel, the most interesting...
What was their survey?
You mentioned there was a survey that...
Did you see a survey, or was it a day that they...
Places that people wanted to visit in their first leisure trip post-pandemic.
And historically, California has been at the top of that list.
The most dreamed about place to visit.
The most recent one I saw, Florida, is actually on top of that list.
I guess people know they're open and they know they can go down there and go to Disney World and go to the theme parks and enjoy the sunshine and do things.
And we could do all that here.
So unfortunately we may be losing out not just on the immediate traveler but potentially on the future traveler as well.
Do they have any strategies there in terms of are they completely open or are they doing testing or what are the plans that they have to mitigate the virus in those places that are open?
Those places that are open, I know that they've had similar numbers to California, yet they haven't had the lockdowns that we have.
Florida, in fact, I'm going there tomorrow to their convention center in Orlando to see how they operate a convention because they have mass testing of the attendees before they can go into the convention center.
Negative test?
You can go in.
And I think that's something we're going to have to look at in the future, and if that can help convince the governor and others that that's a protocol that would work, I think we're willing to try to make that happen.
But I think they've got some things like that in place.
I know in Florida, Texas has lighter restrictions, but testing may be our way out of this.
And now, tell me more about the people that work in this space, in the hospitality.
They are pretty much, a lot of them are unemployed, right?
Right now?
Yes, they are.
A great number of them are.
And these are people that provide for their families and their homes and so forth.
And it's been heartbreaking to watch.
But a lot of people of all categories.
It's not just your housekeepers or your front desk employees at hotels.
It's It's everyone from that to sales to technology to servicing people to all different levels in the tourism and hospitality industry because it does cross over into so many different space industries.
So that's seeing that effect and seeing the people unemployed are moving to other industries or moving to other states and so it's going to be difficult to again flip that switch back on and recruit everyone to come back.
And what is the impact on your city?
Well, the city with our revenues and 50% of our revenues coming into the city, and we're down from that.
I mentioned the hotel occupancy is in the 20%.
So you look at a lower rate at the hotels, which means a lower tax, an occupancy tax coming in that funds the city's general fund, which funds the city services going out to the city.
So the city is, that lack of revenue, we've never seen anything like that before.
So ultimately, there's fear of That affects city services in the future and lowering, you know, are the libraries going to stay open?
Is there going to be the waste management that we've always had?
And more importantly, are we going to keep up the police and fire services that are necessary in a city the size of Anaheim?
And that's a real fear.
And what are your thoughts on how we can get out of this?
You mentioned testing, but are there any other thoughts that you have?
I think it's testing, and I think it's going to be, for us, it's finding those people.
I mentioned nearly 50% who think they'll take a trip between March and August of this year.
How do we target those people directly?
How do we find those people directly?
And again, the Orange County who want to just come to Anaheim or people in Southern California and then people in all of California and then the touch state region and continue to grow that circle and really laser-like target those people who will travel and those people that feel safe traveling and let them know That we're safe to travel to,
we have things open, we have protocols in place for them to feel comfortable, safe with social distancing or masks, whatever it is that's going to help them feel comfortable coming out again and that's what we've got to focus on.
Do you think that's the bigger issue in terms of people not feeling safe or is it because it's shut down?
Or is it a combination?
I think it's a combination, but I think people are very...
California's in the news, you know, nationally all the time because of the shutdowns and so forth, so they know it.
I've had people from all around the United States call and say, what are you guys doing?
Killing the whole state with their lack of tourism.
And so I think we've got to look at all that, whether it's testing, the protocols, people want to feel safe and they can go in and there's the mask or the distancing or the sanitization areas where you can use the sanitizer, all that in place.
And then people have caught up with that and people are doing that on a regular basis now.
So I think People will recognize it when it's in place and available.
You go to Downtown Disney and they have those stations everywhere and they check your temperature when you come in and they have protocols in place and are doing it.
They're the gold standard and it's successful in Orlando and could be even more successful here in Anaheim.
So we've got to look at all those things and convince the traveler that it's safe and convince our own governing officials that the protocols are in place and it's safe for people to come visit.
So you mentioned targeting these travelers from March to August.
What if you guys don't open for another six to nine months?
When do you think the impact would be devastating on Anaheim?
I think we're already to that point, but I think, you know, I've talked to many hotel owners who have said if this goes into the summer that they're out of resources.
So there's a possibility that banks will own these hotels.
There's a possibility of, you know, the restaurants not coming back, people moving away, and that if you don't have the hotels in place, We've got commitments from future conventions who need a certain amount of rooms for a room block.
If the hotels don't come back, we might not be able to host those conventions in the future.
So this stretches from a one-year, year-and-a-half, two-year incident to a decade-long effect on both the city and the state, and that's what we're afraid of.
What do you recommend to the policymakers?
I think they need to talk to our industry, talk to the hotels and see exactly what they're doing, see what exactly Disneyland is doing in place, look at different options on whether it's testing or as the vaccines go up.
There's a term that's popping up in the tourism industry called vaxication, which is you get the vaccine, you go on vacation.
So there's things like that that We need to look at and, you know, I would just encourage them to listen to those experts who are frontline, not just, or bring those health professionals to come take a look at the protocols and see that it's working.
You haven't seen a big outbreak from Disney World.
You haven't seen a big outbreak in some of these places that are open.
So I think we've got to look at that and encourage them to, we can do two things at once.
We can be safe and reopen the economy at the same time.
And that's hopefully where we're headed in the not too distant future.
It seems like the state has shut down theme parks like Disney and then indoor dining and dining.
And now, what does the state, does the state have a plan for tourism, like for this industry?
Is there any stimulus back help?
You know, we need it, but there's a lot of, The PPP that came in from the federal government was of great assistance to the small business owner and so forth.
Even our organization was not available to us until just recently.
But it is anything that the state could do for not just For the unemployed, but also some of these business owners who, their financing models, we need to take a look at that and help them with their banks and their lenders.
How can they not be penalized by something that is of no fault of their own?
So anything that the state could look at Or even the federal government could look at to support these business owners as well as those that have been unemployed due to the pandemic.
So we expect another round of assistance coming and hopefully they'll keep some of these places open for the future when we can reopen.
Do you think they should have allocated more funding or separate type of funding for businesses that are shut down?
I think so, but they didn't come to us.
Some are shut down, some are limited, open.
Some industries are booming right now and that's to have relief in just a broad brush doesn't seem that appropriate when you look at some cities that are overly dependent upon tourism.
That are now shut down for all practical purposes.
How can we help them that have lost maybe more than some of these areas that maybe have not lost as much?
It's hard to get to that place, but hopefully they'll continue to look at opportunities like that and view places like Anaheim that has been so dramatically hit As opposed to a place that maybe has a beach or maybe has something that is able to keep their hotel occupancy up a little higher.
Not as high as usual, but keep them alive and keep them going.
Where we are so dependent on large group activities, Disneyland, Convention Center, Honda Center, Angels Games, that is all cut out.
That's all shut down.
And so that has kind of affected our destination much more than many out there.
Do you think your industry has a voice, or do you think other industries like tech space, they have a much stronger voice than you guys do in Sacramento?
That is a great question.
We have an organization called CalTravel, which is their main effort is advocacy.
We've worked for years to try to get the voice of tourism In Sacramento as well as in Washington D.C. through our U.S. travel organizations and we've worked for years to do this and we thought we had made great strides with our elected officials and then when this occurred maybe we realized we didn't have as big a voice as we thought we did And we've still got a ways to go.
In my own type of organization, which is a destination marketing organization, we had worked.
We'll go to visit with our elected officials and tell them what we do.
Then this occurred and it seemed that nobody knows what a destination organization is anymore.
So we were not eligible for the PPP as a 501 until its most recent round.
We get lumped in with a lot of chambers of commerce or lobbying organizations, and that's not what we are.
We're more of a driver economically, and so we've got a long way to go, and I think this has shown us that we need to put more pressure on our advocacy efforts, both in the state as well as within the country.
Do you have any other thoughts?
I think that a couple things.
One is I think this lack of meetings, conventions, and tourism puts even more of an importance on face-to-face meetings because people can Zoom all day long, but the actual face-to-face is so valuable and people recognize that now.
And people have that pent-up demand to get out around other people.
I see that, but you also, people around the state, you know, back in January of last year, when things were going great, we were actually in discussions about, do we have an over-tourism problem?
Is too much tourism not good?
Because it's the crowds and so forth.
And it's funny that now we're realizing the impact that tourism has and how so many things depend on that.
And it did, in many ways, drive the entire economy.
And we're seeing that now and seeing the value of tourism.
So, big changes from last January to this January-February timeframe.
Well, thank you.
Absolutely.
Thank you for the opportunity.
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