The Napa Valley tourism industry has a good chance of recovering from the COVID-19 pandemic, but a long and difficult road is ahead.
Hotel revenue for the fiscal year beginning July 1 is expected to be down by 70%, according to Linsey Gallagher, president and CEO of Visit Napa Valley. Visitation might not return to 2019 levels for two years or even longer, she said. Gallagher spoke to our editorial board last week.
We were impressed with Gallagher’s ability to marshal data and develop detailed marketing plans and reopening protocols, even as the timing of the reopening remains uncertain.
On the bright side, the Napa Valley is well-positioned to cash in on its well-earned reputation for top-notch wine and hospitality, and market research suggests that tourists emerging from the pandemic will prefer rural locales like ours to more densely populated urban destinations.
However, there’s no sugar-coating the unprecedented economic impact of COVID-19, which is expected to be nine times worse than that of 9/11, Gallagher said.
With hotels closed until early to mid-June at the earliest, hotel revenue for April, May and June will be effectively zero.
That’s devastating not only for hotels, but for their workers, the stores and restaurants that depend on overnight visitors, and the local governments that rely on hotel taxes for a big chunk of their General Fund: 22% in St. Helena, 65% in Yountville, and 54% in Calistoga.
Research indicates there is some pent-up demand among would-be tourists, especially millennials and those within driving distance, but not nearly enough to get us back to normal anytime soon.
Gallagher expects hotel receipts to be 10% of the previous year for the month of July, 20% per month through December, and up to only 75% by next June.
Enhanced cleaning and social distancing measures – and the communication of those measures to potential visitors – will be crucial for hotels.
Gallagher ran down some of those protocols: plexiglass shields at front desks, no valet parking, no more than two people in an elevator, no high-touch objects like pens and paper and coffee machines in guest rooms, and extra toilet paper available only on request.
The cleaning protocols are extraordinary. Housekeeping will not enter the room during a guest’s stay unless absolutely necessary. After checkout, the room will be left untouched for 24 hours before being thoroughly cleaned. Then the cleaned room will be closed to guests for another 24 to 48 hours, just to be on the safe side.
The extra precautions won’t be cheap. Between that additional cost and the likelihood of lower than normal occupancy, Gallagher expects some hotels to stay closed this summer rather than operate in the red.
This isn’t a doomsday scenario. The Napa Valley brand is as strong as ever. We’re close enough to the Bay Area and Sacramento to attract a large pool of potential visitors looking to avoid air travel, but we’re far enough away to still feel like a vacation spot.
And don’t bet against Gallagher and her team at Visit Napa Valley, which is doing a bang-up job preparing hotels – to the extent possible – for this unprecedented challenge and developing a marketing plan to correspond with each stage of California’s gradual reopening.
This is a time of great economic loss for employers, employees and their families. The recovery could be agonizingly long, but it will happen.
Editor’s Note: Because of the health implications of the COVID-19 virus, this article is being made available free to all online readers. If you’d like to join us in supporting the mission of local journalism, please visit napavalleyregister.com/members/join/.
The Star editorial board consists of editors David Stoneberg and Sean Scully and community volunteers Norma Ferriz, Shannon Kuleto, Bonnie Long, Peter McCrea, Chuck Meibeyer, Gail Showley and Dave Yewell.
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