The COVID-19 pandemic has taken a lot from us. Lives have been lost, as have jobs, and while some new businesses were born, many others are closed for good.
Greater Madison also plays host to a wide array of events, both small and large, and nearly all of them had to be canceled or postponed after March 2020. While some of those events have yet to make a comeback in 2021, others, like the CrossFit Games, already have made a triumphant return. Still more, including Ironman Wisconsin (Sept. 12) and World Dairy Expo (Sept. 28–Oct. 2), are on the way.
Now, as the events return, a bruised and battered local business community must make do to accommodate the influx of visitors these events bring, even while surging cases of the Delta variant of COVID-19 have brought back face masks and the threat of renewed capacity limits on restaurants, bars, and retailers if things don’t change. As good as it is to have these events back, there’s one thing that’s lost forever: the money they would have injected into the local economy.
The dual impact of the COVID-19 pandemic and a summer of social unrest deeply affected the people and businesses of Dane County’s tourism industry, according to 2020 economic data released by the Wisconsin Department of Tourism.
Visitor spending, which was $1.4 billion in 2019, was down nearly 43% in Dane County, which was 50% more than the state average of tourism economic loss. In downtown Madison, spending fell from more than $300 million to just over $100 million, plunging more than 62% in 2020, more than double the state average. Downtown lodging was hit the hardest, with a 78% drop in spending. Food and beverage fell 58%, and retail fell 50%.
Dane County saw more than 6,700 people who worked in the hospitality industry, more than 30% of the local hospitality workforce, lose their jobs last year. The workforce fell from more than 22,000 people to just over 15,000. Again, the biggest hit was in downtown Madison with 2,000 community members losing their jobs in hospitality — 44% of the downtown hospitality workforce, which was double the state hospitality job loss average.
These losses radiate throughout Dane County as tax revenue associated with tourism spending fell by 33%, or more than $57 million. While 2019 was a banner year for tax revenue, which resulted in Dane County households seeing $780 in equivalent services from tourism taxes, 2020 saw that government assistance fall to $507 per household.
“These numbers are a hard truth,” notes Destination Madison President and CEO Ellie Westman Chin. “Dane County tourism was devastated in 2020. Thousands of people in our community, the backbone of our hospitality industry, bore the brunt of a very difficult year. For the first time in the 49 years our organization has been leading regional hospitality efforts, Dane County has fallen from being the second biggest generator of tourism revenue for the state. We have our work cut out for us to help the Greater Madison area rise back to that level.”
Typically contributing 10% of overall tourism spending for the state, Dane County instead contributed 15% of the loss Wisconsin saw in 2020, leading all counties. Overall, Dane County dropped from second to third place in Wisconsin tourism spending, falling behind Sauk County, which saw a 16% decline in 2020. Milwaukee County again led tourism spending in Wisconsin.
According to Westman Chin, the local tourism industry doesn’t project to rebound to 2019 levels until 2024, which is why getting some of the larger events Madison plays host to back this year has been so important, even if the local retail, restaurant, and hotel sectors are shorthanded to accommodate everyone right now.
“Last year, we lost 96 events Destination Madison had a direct hand in, resulting in more than $56 million in lost spending for Madison,” notes Westman Chin. “There were additional canceled events we weren’t involved with, such as Brat Fest and Art Fair on the Square. A number of the events we lost last year have rebooked with Madison this year and in future years. So, we will recover some of that lost spending, but it will be spread out over several years.”
Welcoming visitors
When it comes to catering to event visitors, finding enough workers to staff the businesses that have so far survived the pandemic may be a more immediate challenge than returning the events themselves. Making sure everyone is comfortable frequenting those businesses is its own difficulty.
While the business losses along State Street have been well chronicled, Monroe Street also plays a big role in downtown commerce, especially on Badger game days.
Carol “Orange” Schroeder, chair of the Monroe Street Merchants Association and co-owner of Orange Tree Imports, says there are many businesses on Monroe Street eager and ready to serve visitors to the community. “Fortunately, we didn’t lose many during the pandemic, and we’ve even had several new shops open!
“The public is eager to return to in-person shopping experiences, and to Badger game festivities,” Schroeder continues. “But the Delta variant has us worried about Camp Randall being filled to capacity with potentially unmasked fans. Restaurants and bars obviously can’t require masks, so they may have to go back to capacity limits. But we’re optimistic that it will be a good season for our retail shops as long as we don’t have to make customers wait in line to come in.”
“The labor shortage has not significantly affected Madison’s ability to put on events,” says Westman Chin. “However, the labor shortage does impact the overall community experience of attendees. Hotels, restaurants, retail, and rideshare/transportation are challenged to find workers and especially challenged to find experienced workers. Event attendees may find themselves waiting longer for tables or for food, seeing hotel rooms cleaned upon request instead of automatically, or paying more for rideshare. Our message for visitors is to be patient as the industry builds its workforce and skill level.”
According to Westman Chin, the pre-COVID room inventory was sufficient for Madison and there generally weren’t issues of not having enough hotel rooms. But she says Madison’s competitive challenge was, and is, having rooms spread over several hotel properties for events at Monona Terrace and Alliant Energy Center, rather than having a single hotel with enough rooms to accommodate a large group.
“While several restaurants and retail locations closed during the pandemic, others opened, so overall our restaurant and retail offerings are robust,” explains Westman Chin. “Area visitors may notice a difference downtown, which is still working to reach full business capacity. One of our recovery plan goals is to support the work the Downtown BID, DMI, the city of Madison, and others are doing to fill those available spaces with interesting and diverse businesses.”
Not all the way back, yet
Though many events are back, the calendar still isn’t as full as it once was.
“We canceled all of our special events in 2020 except the Sidewalk Sale, which is also the only one we’ve held so far this year,” notes Schroeder. “The loss of the Monroe Street Festival, the Chocolate Walk, and Holiday Glow on Monroe just added to the pain that our businesses were already experiencing with capacity limits, masking, and the decline in customers wanting to come into a shop or restaurant due to COVID.
“In addition, HotelRED closed in March 2020 for what we thought would be a few months, but unfortunately it is not going to be reopening as a hotel,” continues Schroeder. “We had hoped for a return to some sense of normalcy on Monroe Street this fall, however the Delta variant is of great concern to both our business owners and our customers. There is already a return to mask-wearing in our area, and we are concerned about our restaurants when cooler weather makes outdoor dining impossible.
“We want to beat the pandemic for good, and we know that masks and vaccinations are essential,” concludes Schroeder. “It would help if Dane County — and the rest of the state, if that were possible — reinstated the mask mandate. It’s very hard for individual businesses to have to enforce their own rules regarding masks. Visitors from other areas are less likely than locals to be masked, so conveying the message that masks are welcome, or required, when coming to Dane County can decrease the hassle for businesses.”
“Our quality of life in Greater Madison is tremendously dependent upon visitor spending,” adds Westman Chin. “The pandemic showed how hard it is for restaurants and venues to remain viable without the infusion of visitor spending. Even if a restaurant is not frequented by visitors, local people who dine there and local businesses that provide services to the restaurant are likely impacted by visitor spending. Additionally, the lifestyle offerings we have in Madison are what attract people to potentially move here, work here, and invest here. If we lose those important quality-of-life opportunities, we may lose the ability to compete as a community on many business fronts.”
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