California Wine Country hotels see only brief relief from steep decline in business during coronavirus pandemic
The pandemic’s wrath this year on the North Bay’s hotels and, by extension, tourism, can’t be overstated. In the nine months since the state’s first shelter-in-place orders, the region’s lodging properties have gone from housing only essential workers or closing altogether, to reopening, and back again.
The industry will close the year not anew like it started, but where it landed in mid-March. The Wine Country region of the North Bay, primarily defined by Sonoma and Napa counties, tells much of the story.
“Overnight occupancy dropped 42% for the 2020 calendar year through October based on (STR) metrics,” said Linsey Gallagher, president and CEO of Visit Napa Valley. “Preliminary November numbers show 45% occupancy in hotels, compared to an average of 70% in the previous year, and with the variation in regional stay-at-home orders, the first two weeks of December lodging averaged just over 30% occupancy in Napa County.”
Without travelers checking into hotels, the impact on regions popular for tourism is devastating.
Within days of the first shelter-in-place order on March 19, Visit Napa Valley temporarily closed its welcome center and implemented a mix of reduced staff hours and salaries, as well as layoffs, Gallagher said at the time.
Cuts at Sonoma County Tourism also were swift, starting two days before shelter-in-place was formally announced, Claudia Vecchio, president and CEO, told the Business Journal at the time.
Immediate moves included furloughing six employees, ending the company’s 401(k) match program, implementing a 20% salary cut to the executive team, and cancelling contracts both with its domestic public relations agency and international tourism agencies that promote the region, she said.
“All teams reviewed budgets, and removed all absolutely unnecessary programs,” Vecchio said at the time.
Come June, it appeared there was a light at the end of the tunnel when Newsom announced hotels could begin reopening starting June 12 after submitting a mandatory health report ensuring compliance with COVID-19 health benchmarks.
Hotels were slowly climbing out of the hole until Dec. 3, when Newsom implemented a new regional stay-at-home order based on ICU-bed capacity dropping beneath 15% in any of five regions in the state. All of California is now under the order, once again allowing hotels and lodging to stay open only for essential travel.
The American Hotel & Lodging Association last month released results of a survey that found 71% of hotels nationwide won’t survive another six months without further government relief. After it was announced last week that a new government relief package had passed, hoteliers reacted with a glimmer of hope while also expressing much more help will be needed, AHLA stated.
That leaves a big question mark going into 2021, but Gallagher said she’s hopeful the recent vaccine roll-out will help the industry begin to recover, though it likely won’t be anytime soon.
“Overnight visitation in Napa is expected to start to rebound by Q3 of next year” she said. “This will be aided by an anticipated increase in visitors from fly-in destinations, who are essential to boosting hotel occupancy levels above the 50% to 60% range.”