Small businesses lifted by return of tourism as Americans rebook trips

By MAE ANDERSON

AP Business Writer

Small businesses in the U.S. that depend on tourism and vacationers say business is bouncing back, as Americans rebook postponed trips and spend freely on food, entertainment and souvenirs.

U.S. states and cities have loosened many of their restrictions on crowd size and mask-wearing, a positive sign for businesses that struggled for more than a year when theme parks and other tourist attractions were shuttered.

Still, the return to a pre- pandemic “normal” is a way off for most. There are few business travelers and international tourists. Many businesses are grappling with staff shortages and other challenges. And if a surge of the more contagious delta variant or another variant of the coronavirus forces states to reenact restrictions or lockdowns, the progress might be lost.

The U.S. Travel Association, a travel industry trade group, predicts domestic travel spending will total $787 billion in 2021. That’s up 22% from 2020 but still down 20% from 2019 levels. The association predicts travel spending won’t completely rebound above 2019 levels until 2024.

In Santa Fe, New Mexico, Jenny Kimball, co-owner of the independent hotel La Fonda on the Plaza, with 180 rooms, said her hotel is sold out through the summer and booked about 90% on average for the fall. That’s a welcome change from the two or three guests the hotel had at one point as it stayed open during the height of the pandemic.

“It’s crazy busy, it’s wonderful, everyone is happy,” she said.

The clientele is different than prior to the pandemic: There are more families and people working remotely, and they’re staying longer, an average or four or five nights compared to two or three.

“Families want to come and stay longer and really vacation and see more of the city and more of the museums,” Kimball says.

Kimball’s biggest problem: A shortage of workers in the restaurant, bar and kitchen. She urged vacationers to have patience.

“It’s very hard after such a horrible year to have the demand and not be able to serve them, because we don’t have 100 percent staffing back yet,” she says.

Heather Bise owns and runs a 7-bedroom bed-and- breakfast in Cleveland, Ohio, near the Rock and Roll Hall of Fame. She opened The House of Bise Bespoke in 2019 and catered to international tourists, attracting guests from New Zealand, Botswana, Eastern Europe and other far-off places.

The cancellations started in January 2020 and she refunded guests thousands of dollars.

So, Bise retooled her business model and switched to renting out the whole house. Ohio lifted restrictions on mass gatherings in March, and the Hall of Fame reopened in June. Business has rebounded during the past two months — so much so that she’s making more than she was pre-pandemic. Demand is so strong she raised prices and switched from serving breakfast and dinner to just breakfast.

But her guests are now all from the U.S., usually families meeting up for a reunion or wedding parties — which now make up 60% of her business. She worries that the wedding business will evaporate after the summer and fall.

“Let’s just hope people are having weddings in January,” she said.

Many owners are pleasantly surprised by the pickup in domestic tourists, but still need to see corporate travelers and tourists from overseas before business is back to normal. That could take some time. While improved from 2020, the USTA estimates that spending on business travel this year will be less than half of 2019’s $270 million and international travel spending will total about one-third the $179 million spent two years ago.

Martha Sheridan with the Greater Boston Convention & Visitors Bureau said the Boston tourism industry is relying on “leisure visitors” — families traveling to the city to take in attractions, couples vacationing and women taking “girls weekends.” That means weekend business is strong, but mid-week business is still “significantly lower than what it would normally be.”

That could begin to change, she said, when conventions resume at the end of July.

Because of the pandemic, Boston Duck Tours lost the big groups it usually counts on — not only people from international cruises in port or in town for business travel but also students on school field trips. The tour group has offered land-and-water tours in the Boston area every year since 1994.

Business is about 80% of 2019 levels, with 21 of the 28 duck boats — which can operate on land and water — running at about 75% capac- ity. But leisure travelers have come back strong, said Cindy Brown, CEO of the company.

“We weren’t sure how busy we would be,” she said. “I’ve been shocked to see how many people are eager to travel, see attractions and get out of their houses.”

And so far, tourists have been freewheeling with spending, small business owners say.

Denise Quinn owns The Gilded Oyster jewelry store in Falmouth, Massachusetts, which counts on Cape Cod vacationers for much of its business.

Since May, when Massachusetts dropped its mask mandate and restric- tions on indoor and outdoor gathering capacity, shoppers are coming in droves and spending more.

“Now, it’s just great to be here, we’ve opened up and mask wearing is done,” she said. “Vacation rentals and inns are all booked, and peo- ple want to treat themselves.”

People are spending more in the shop, she said, buying multiple items instead of just one, including gifts for themselves as well as others.

“The average price point is definitely higher,” she said. “People come in to treat themselves and get a memento from their time at The Cape.”

Quinn says she is concerned that COVID cases are again on the rise and hopes to maintain business as usual even if restrictions are put in place. If necessary, she’s prepared to fall back on a mask mandate, online shopping, curbside pickup and home delivery to keep the business running.

Alan Dietrich, CEO of Crater Lake Spirits in Bend, Ore., which has two tasting rooms catering to tourists who come to the area, said he’s seen an explosion in demand since pandemic restrictions were fully lifted ahead of the Fourth of July.

“Every minute we’re open, we’re seeing people coming in,” he said. “People have been locked down for the last 14 months, they’re dying for something to do. The limiting factor is just staff.”

He is also seeing people spending freely. In Bend, the average price of an entree has gone up $3 and the price of a cocktail has gone up $1 due to staffing shortages and higher wholesale food prices, says Dietrich, who also sits on the board of Bend’s tourism development group.

“No one is balking at the prices at all,” he added. “Nobody cares what stuff costs right now, people are just happy to be out and about.”