From staycations to big events—devastated Austin tourism may take years to recover

Austin played host to nearly 30 million out-of-towners who dropped some $9.2 billion on the local economy last year, but local experts warn it could take years for hotel rooms, sports stadiums and banquet halls to return to those levels of tourism after pandemic-era restrictions devastated the travel industry this spring.

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"It's going to be a while before we see that again," said Tom Noonan, chief executive officer of Visit Austin, which is funded by the city's hotel occupancy tax and promotes Austin as a business and leisure destination. "I don't think we'll completely recover for two or three years."

Last year, Visit Austin booked 1,122 meetings, conventions and sports and social events for some 700,000 attendees.

Just over half were corporate events, another 31% were association meetings, and the remaining 18% were sports, social and government events, said Christine Cramer, director of market analysis and research for Visit Austin.

"Everyone comes to Austin for everything," Cramer said. "There's something that appeals to every interest and every generation."

The picture will look very different this year.

Some 167 conventions, meetings, sports events and social activities, like weddings and reunions, booked by Visit Austin have been canceled since March, Cramer said.

Sports events like the Texas Relays and the Dell Match Play golf tournament were just a few of the sports events that were shut down.

The Spiceworks Tech World conference was set to host 4,000 attendees in September, and the Forrester/Sirius Decisions Summit was to bring 5,000 in May, Cramer said. Both went virtual.

The canceled events would have brought some $217 million to the local economy. Attendees would have rented 213,000 hotel room nights for those events, Cramer said.

Those numbers don't include the cancellation of SXSW and other events that are booked outside the purview of Visit Austin.

Occupancy rates for the city's 43,000 hotel rooms in Austin, which typically don't go below 60% even in the slower summer months, dropped below 17% at their lowest, Cramer said.

Now they're hovering around 25-27% occupancy rates, Cramer said.

Downtown, where nearly 12,000 hotel rooms bring in more than half of the occupancy tax revenues for the city, the low reached 3.9% two weeks ago, she said.

The impact of the coronavirus on travel has been nine times worse than the impact of the Sept. 11 attacks, according to a study by the American Hotel and Lodging Association.

And long-term restrictions and lingering fears mean people will likely be inclined to stay home until a treatment or a vaccine is found, Noonan said.

"It'll have to be something like that before we're going to see tremendous change in terms of the size of events taking place," he said.

Noonan predicted that recovery would start with Texans venturing out for "staycations" a short distance from home. Then essential business, followed by more leisure corporate travelers, and smaller events starting with 50 to a few hundred people, he said—all defined by new sanitation practices.

"You're going to start slowly seeing these things build up until you can start saying, yes, we can do that 2,000- or 5,000-person event or convention or sporting event," Noonan said. "So that's the way it's going to come back."

Signs of hope are out there, even if they are moving at a glacial pace.

Local hotel occupancy rates are creeping up by the week, and events are still booking for the less immediate future, Noonan said.

"The meeting site has always been the greatest insurance plan for destinations because you book them 2, 3, 5 years out," he said. "We're still doing that right now."