As vaccination rates rise and local cases of COVID-19 decline, Jefferson City is starting to see hope for a return from the tourism industry.
In 2019-2020, COVID-19 ravaged the country and the tourism industry came to a halt. One measure of that decline was revenue from the Jefferson City lodging tax, which is a 7 percent tax paid on hotel rooms in the capital.
In 2020, the lodging tax brought in $ 959,839, down 24% from 2019, which brought in $ 1,374,954. The 2019 figures reflect a steady increase in tax revenue on accommodation compared to previous years. For example, in 2018, the tax brought in $ 1,226,119. In 2017, the tax brought in $ 1,235,783.
So far for 2021, the numbers are returning to what they were before the pandemic.
“Talking with hotels, they seem to feel that things are going in the right direction,” said Diane Gillespie, general manager of the Convention and Tourism Bureau. “It’s kind of a hit or miss kind of thing, but nobody had to shut it down or anything.” So there is a business there.
The CVB sees tax revenues two months after a person’s stay. For example, stays from February are reported in April figures.
The 2020 monthly reports line up almost perfectly with the rise – and the drops – in COVID-19 cases.
As cases increased in March, tax revenue fell below what it was at the same time in 2019. The following month, Missouri had a stay-at-home order and revenue plummeted. fallen to the lowest since before 2017.
While it soared a bit in June and July – $ 94,499 and $ 96,451 respectively – winter brought tax revenue down to $ 60,099 again in November.
For 12 consecutive months, tax revenues remained lower than in the previous year.
March 2021 marked a turning point with $ 110,467 to come – roughly $ 30,000 more than March 2020 at $ 80,913.
Since March, each month has yielded more than the same month in 2020 and is closer to the pre-pandemic figures for 2019.
For the last two months reported, the figures for June ($ 132,627) and July ($ 118,674) topped 2019 figures by a total of $ 60,000.
A happy medium
Gillespie said she spoke with other CVB directors around the state when the pandemic began.
“The conversation had started that we probably weren’t going to recover until 2023,” she said. “We were all like, ‘Oh, not at all. It won’t be that long. Then things started to go, “OK, maybe it will be 2022.” July has hit, and now we’re all saying, “Things might not look like (like 2019) until 2030.” It’s kind of a coincidence. “
However, she said, it looks like Jefferson City is in a happy medium to bounce back faster.
“If a group wants to meet at a hotel, it’s likely that they are the only group in the hotel to meet,” she said, “while some of these large resorts might have two or three different groups. Maybe they would feel more secure having their people in some sort of small group rather than being with other groups.
Gary Plummer, president of the Jefferson City Chamber of Commerce, said he was optimistic about 2022.
The hospitality industry, like many others, has learned to adapt in 2020 and continues to improve.
“Some people in the hospitality industry, especially on the restaurant side, have had some of their best years,” he said. “I think of Chick-fil-A and others who have focused almost all of their activities on their drive-thru. People are adapting to their times.
“Overall, even though we have this wave of delta variants, I think this community is optimistic about our ability to get through that and better times to come,” Plummer said.
Trey Propes, president of the Missouri Hotel and Lodging Association, said things were looking up but the hotel industry continues to struggle and many are still operating in the red.
“In my opinion, we have received little or no help when it comes to public funds, even though our industry was one that was hit harder than the others,” he said. “People were still eating, people were still calling restaurants and getting pickup orders. Drive-through restaurants flourished. But hotels in general, for the most part, have really suffered.
While Jefferson City hasn’t lost a single hotel, Columbia has lost at least one, he said.
“They returned their keys because they couldn’t get it to work,” Propes said. “It’s a huge hotel. They had to return their keys, gave them back to the bank. I think the bank has since sold it, but that’s what they must have done – just wash your hands and walk away.
Propes said two things could help the hospitality industry right now: give the industry some of the disaster recovery funding and offer a one-time property tax exemption program.
Of the federal funding that has been released, the hospitality industry has not received much, he said. He works for Ehrhardt Hospitality, which has hotels scattered throughout Missouri and Illinois.
“In Illinois we are blessed,” he said. “Their state has been distributing funds from the disaster recovery fund to hotels for almost a year. Missouri just hasn’t done that.
Things are starting to improve, but there are still hurdles on this path, he said.
For example, property taxes are due by the end of the year, and a reduction in property taxes could be good for hotels right now, he said.
“Property taxes on hotels are a hell of a lot of money,” he said.
Property taxes are collected by the city, county and school district. For Jefferson City hotels, the combined tax rate for 2020 is $ 6.67 per $ 100 of assessed value. For example, if the assessed value of a property is $ 1,117,920, the property tax bill would be $ 74,557.44.
“Any one-off property tax rebates they could offer to hotels would definitely be welcome,” Propes said. “That would definitely reduce the bottom line as to what it will take for a hotel to continue to survive. “
Upward or downward trend?
Looking at the occupancy rate and average daily rates in the area, there are signs of improvement for tourism.
Both hosting statistics work like supply and demand, Gillespie said. When demand is high, the average daily rate (ADR) will be high, she said.
While the ADR for Jefferson City, Columbia and the Lake of the Ozarks is higher in 2021 than in 2020, Jefferson City has made larger gains than the other two.
Year-to-date for 2021, Jefferson City’s ADR is $ 90.96, up from $ 82.26 in August 2020. Meanwhile, Columbia’s rate is $ 83.39 so far this year and $ 76.85 around the same time last year. Lake of the Ozarks is $ 122 compared to $ 116 at the same time last year.
“I am happy to see that our ADR is heading in the right direction. It’s a big plus for us, ”said Gillespie.
But Propes said he feared ADR was still weak.
“When I look and see the percentage of rooms sold and see the price they are being sold for, I just don’t know everyone is doing it,” he said. “Thank you to them if they had savings and burned them, if they took the money (Paycheck Protection Program) to help pay their employees. “
Gillespie acknowledged that there was still a lot in the air as people bounced back on whether to host conventions in person.
“I’ve spoken to a few different association directors here in this city over the past two weeks and one has its event in October, and their numbers are on the rise,” she said. “Then I spoke to another of our members who had a conference, and they weren’t at 50%. “
But Gillespie suggested that more tourism return to Jefferson City.
“We will continue with sporting events,” she said. “We have a strong group of events happening in our community. I think you’ll start to see some conventions come back. We will see how the legislative session unfolds.
When it comes to actually seeing visitors, Propes said, it depends on people’s changing mindsets.
“When people’s mindsets change – things are safe and clean – the more I think things will get back to normal,” he said.