Sheltering Americans Give Record Chill to Tourism This Summer

(Bloomberg) -- Bookings for Judson Gee’s vacation rental home in Wrightsville Beach, North Carolina, were on track to make 2020 the best summer in more than a decade, until mid-March when guests abruptly canceled their reservations. This week, he got his first new request – but it’s not until late June.

“We felt terrible about it, of course,” said Gee, 52, a Charlotte-based financial planner. “We also understood that it was pretty dire what was going on.”

Memorial Day weekend marks the unofficial start to summer but this year millions of Americans are continuing to shelter at home from the Covid-19 outbreak and those who do venture out face restrictions such as closed restaurants, theme parks or swimming pools.

While some destinations are beginning to see an uptick in traffic, tourism officials say the bulk of activity won’t come until later in the season. The slump is yet another blow to the U.S. job market, already the worst since the 1930s, especially for younger workers who rely on seasonal employment.

Travel spending for the holiday weekend will plunge by nearly two-thirds to $4.2 billion, according to estimates released this week by the U.S. Travel Association, an industry group. Almost everyone who does take a trip will likely drive. Domestic air traffic has dropped more than 90% below year-earlier figures, according to government figures.

Hiring

Hiring of seasonal workers is likely to decline more than 75% from year ago levels, estimates Dante DeAntonio, labor market economist with Moody’s Analytics.

Last year, the number of employees aged 16 to 24 increased by 2.4 million in the three months ending July 2019, according to the U.S. Labor Department. Since the Covid-19 pandemic began, almost half of all leisure and hospitality workers have lost their jobs, helping to push the U.S unemployment rate to 14.7% in April, the highest since the Great Depression.

Young European workers, who have staffed many U.S. resorts, are staying home. Visa processing for U.S. work and travel visas at consulates abroad has basically shut down everywhere, except for farmworkers, according to Daniel Costa, director of immigration law and policy research for the Economic Policy Institute.

Road Trip

Destinations that are easily accessible by car will be more popular than those that depend on flights and international tourists, according to industry analysts. Top places for Americans preferring road trips include the Florida panhandle beaches, the coast of the Carolinas, Oregon and Washington, and parts of Wisconsin and Michigan, said Bill Crow, an analyst with Raymond James Financial. Almost all the pickup is in leisure travel, with businesses and conventions on hold this year, he said.

Camping is a popular alternative for travelers looking to keep their distance from others in remote locations. Financial adviser Gee said he’s consistently rented another property he owns, a campground rental off the Watauga River near Johnson City, Tennessee, that’s known for fly fishing.

“People are absolutely dying to get out of their house and more comfortable to be outdoors than in crowded spots,” Gee said.

While U.S. hotel bookings have improved in recent weeks, just 32% of rooms were occupied in the week ending May 16, according to Jan Freitag, senior vice president of STR, a lodging researcher. As of May 14, more than 3,000 hotels remained closed, STR said.

“It will take some time for the public to regain confidence and adapt to the new world and start traveling, taking vacations,” Federal Reserve Chairman Jerome Powell told Congress Tuesday.

Theme parks such as Walt Disney World near Orlando, Florida, and Disneyland in Anaheim, California, are closed. In New York City, a center of the outbreak, attractions such as Broadway shows and museums have been closed by Governor Andrew Cuomo’s order.

When restrictions are lifted, “there is a lot of pent-up demand,” said Fred Dixon, the president and chief executive of NYC & Company, which promotes tourism. At the same time, “People will be more cautious now, just generally about how they make decisions to travel.”

What Bloomberg Economists Say

“Certain businesses with a relatively short ‘high season’ may not be able to reopen in time to salvage their business for the year. If your year is really 3-4 months in the summer, then a lost few months really means a lost year--and in many cases a failed business.”

-- Carl Riccadonna

Myrtle Beach, South Carolina, is getting busier after the city started allowing hotels to take new reservations in mid-May and began lifting restrictions as recently as this week.

Heather Baker and her husband, from

Wilkesboro, North Carolina, arrived last weekend to find swimming pools and hot tubs closed, large attractions shut and some restaurants only doing takeout or delivery. That changed Monday when pools opened and she was able to go shopping.

“The beaches were packed,” said Baker, adding Myrtle Beach is a “great mini-vacation” and she hopes to return later in the summer.

“It’s only a four-hour drive for us, which makes for a nice little getaway,” said Baker, a project manager for a construction company.

June bookings may be down 25% or more from last year but the shortfall will narrow, said Matt Klugman, chief operating officer of Vacation Myrtle Beach, which operates 14 hotels and condo properties in the area.

The company has hired fewer than 100 seasonal employees for the three-month season, compared to around 700 last year, said Klugman. Hiring will likely ramp up later in the season, he said.

The firm’s hotels are doing additional cleaning, added Plexiglass barriers at check in and floor stickers for social distancing, and employees are wearing masks.

“There’s certainly concern,” he said. “We have some travelers who are very eager to get to the beach, some who may be a little more reluctant due to the situation.” Overall, he said, “a lot of folks want to get to Myrtle Beach just as quickly as they are personally comfortable getting here.”

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