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Hospitality industry already seeing effects from COVID-19

The ongoing threat of COVID-19 is causing big concerns for the hospitality industry, which is seeing declines in customers amid canceled events and recommendations to stay home.

Susie Petersen, executive director of the Albert Lea Convention and Visitors Bureau, said she has been in contact with lodgers in Albert Lea, who have already seen negative impacts from the virus.

The manager of one hotel told her she was down at least 50% occupancy on the weekends, which is a big hit on a hotel, Petersen said. They are seeing regular customers such as construction workers and truck drivers so far, but as a whole, traffic is down.

“It is going to be significantly less, and who knows how long it will impact us,” Petersen said.

She said hotels are holding onto the trend that January through March is already typically a slower time for hotels in the area in general, though the real effects will be seen if the decline continues into the summer months.

A survey conducted last week through Explore Minnesota of 674 Minnesota tourism business respondents found that more than half of respondents had already experienced business activity declines of at least 10% within the last 30 days, compared with a year ago, including more than a quarter who were down by at least 51%.

Nearly two-thirds of respondents said they anticipated the next 30 days would be down by at least 51%, and just under half of the respondents said they thought they would start to see improvement in their business activity within three months.

In addition to the effects on the hotels themselves, lower occupancy in the Albert Lea’s hotels also means an impact on the Convention and Visitors Bureau, which uses money raised from the lodging tax to promote the community.

Petersen said people who stay in hotels are charged a 3% lodging tax. That tax is collected by the city, who keeps 5% and then gives the Convention and Visitors Bureau 95% to use for promotion and tourism activities in the community.

“That’s a huge impact down the road,” Petersen said.

She hoped the impacts would not continue into the summer months, which are the highest months for the industry. She also hoped that because of Albert Lea’s location at the junction of Interstate 35 and Interstate 90, that could be beneficial for the community.

According to Explore Minnesota, tourism is a $16 billion industry in Minnesota. The state welcomes more than 73 million domestic and international travelers annually.