Massive drop in visitation numbers and occupancy rates anticipated this year
Photography by Cornell Watson
The list of canceled events is a long one by this point, six months since the start of the global pandemic: Durham’s Full Frame Documentary Film Festival, the American Dance Festival, the PLAYlist summer concert series, Fourth of July celebrations and more. Others went virtual, like CenterFest and Music in Your Gardens.
In a world without COVID-19, indoor and outdoor venues would be packed in the summertime. This year, there were no visitors. No vendors. No music in the air, no frothing beers. It’s a scene that’s persisted: Streets – and hotels – that would normally be packed with guests are eerily empty, save for a few mask-clad pedestrians.
That visual only scratches the surface of local hospitality sector woes caused by COVID-19. Discover Durham told Durham Magazine that projected visitor spending in 2020 will likely be down 45% from 2019’s numbers. That equates to nearly 5.9 million fewer visitors to the Bull City – and some $419 million in lost visitor spending versus the prior year, which saw a record-high $932 million dollars spent across lodging, transportation, food and beverage, retail and entertainment industries.
“The hospitality and leisure sector,” said Susan Amey, CEO of Discover Durham, “has been hit arguably harder than any other. … One of the things that concerns me the most, is just some of the wonderful and beloved businesses in Durham that might not survive.”
We’ve already seen closures at Northgate Mall in May, Durham coworking and maker space The Mothership in June and The Northern Spy in July, as well as a handful of other restaurants, like Gonza Tacos y Tequila, DeeLuxe Chicken and, most recently, True Flavors Diner’s Lakewood location. Prior to COVID-19, there were 12,836 visitor-related jobs created by the tourism industry, roughly 5% of Durham’s entire workforce. An estimated half of those jobs have since been lost.
Neighboring Chapel Hill is combating the same issue. Laurie Paolicelli, executive director of the Chapel Hill/Orange County Visitors Bureau, said in July that the area will be down approximately $95 million in total projected revenue for 2020.
“That will impact the bottom line for [the] town and county,” Paolicelli said. “That will impact sales tax, occupancy taxes. It’s going to be a tough time. We hope to be out of it in fall 2021, but to paint a rosy picture that everything’s going to be fine right away would be misleading.”
Those missing hospitality dollars aren’t coming back. Businesses had to reinvent themselves over the past few months to stem the tide. They’ve transferred to accepting orders and payments online and implemented sanitation measures. They’ve applied for government loans and started GoFundMe’s for employees who they can’t provide jobs for at the moment. Those plans, even taken together, won’t recoup all the lost revenue, but they do raise the question: Are all these changes actually helping businesses’ bottom lines?
“The short answer is no,” Paolicelli said. “The local businesses define [success] as profitability. Those of us in government who are at civic agencies [and] launching a lot of campaigns are really helping to sustain businesses, but I think many businesses would tell you profitability is a goal that they haven’t attained yet.”
Hotel occupancy is still down dramatically in Durham, Amey said. Lodging demand – or total rooms sold – was down 48% this July compared to the same month last year. Some Durham hotels, including 21c Museum Hotel, closed temporarily, and not all have reopened.
That falls in line with national trends: As of July 30, more than half the rooms at open hotels were empty, according to the American Hotel & Lodging Association. That doesn’t account for the thousands of hotels that are currently shuttered; no major hotels have permanently closed in Durham or Chapel Hill yet.
Unscripted Hotel is one of the few that’s remained open since the onset of the pandemic. The federal payroll protection program (PPP) made it possible, but it wasn’t without other significant challenges
“We knew we weren’t going to have a ton of business,” said Matthew Whiteheart, Unscripted’s general manager, “but you want to keep the doors open, keep people employed and keep the economy rolling in some fashion.”
That strategy did help the hotel. Occupancy went up slightly in July from what it had been in March and April, hovering around 20% to 25%.
For some, the struggle has been more prolonged. The Carolina Inn’s successful return to normalcy hinges on UNC students safely returning to campus – far from a given. And although the hotel never closed, its restaurant, Crossroads Chapel Hill, only just reopened Aug. 3 at 50% capacity.
“We didn’t want to open [Crossroads] because the university was still shut down,” Allal Kartaoui, the Inn’s food and beverage director, said. “Not much travel was going on, so there was no need for us to be open. We decided to open the coffee shop for in-house guests – just a limited menu for grab-and-go items.”
With families now funneling into town, there’s a better chance for increased foot traffic in the area – which, in turn, hopefully means more customers. Many hotels’ financial futures are dependent on events happening in and around their locations.
“[Even] the football schedule and what football decides to do is going to make a huge impact on our entire community,” said Heidi Werner, director of sales and marketing for the Inn.
There are still non-university events Werner has handled for the Inn, with weddings first and foremost among them. She estimates she rescheduled some 45 ceremonies from March to June, but the hotel still hosted its fair share of pandemic celebrations.
Those provide some economic lift – as does the Inn’s outdoor space that can be used for dining and events – but it can’t completely mitigate other losses. Werner estimates 60% of the hotel’s revenue comes from transient business, which simply won’t be the same until there is better control over the spread of the virus.
“As we get into next spring, April, May, June, people want to get back together,” Werner said and noted the Inn’s already-booked calendar for 2021. “They’re looking to a point in time where people can come together again and enjoy one another’s company without having to be distanced from one another and without having to have a mask on.”
Hotels also serve to provide economic opportunity to various other sectors in the hospitality industry.
“Twenty cents on the dollar goes to the hotel,” Paolicelli said, “but the rest of that money is restaurants, bars, shopping and attractions.”
A decrease in hotel visitors naturally coincides with a drop across the board: fewer restaurant patrons, fewer bar-hoppers, fewer shoppers. To compensate, many restaurants, for example, opted to pivot their operations to takeout.
But now the financial realities of downsizing full-scale restaurants into delivery/takeout operations, even with some restaurants allowing guests back inside at reduced capacities, are coming into focus. Restaurants operate on razor-thin margins when business is booming; those tiny margins have long since disappeared. A study from the National Restaurant Association shows 75% of restaurants think it’s unlikely they will be profitable within the next six months (under the assumption there will be no additional federal relief packages).
The lack of full-service restaurants also leaves many traditional restaurant employees without a role. Or a job.
Acme Chef and Owner Kevin Callaghan shifted his Carrboro restaurant into a full-service takeout operation, but it’s not the same, he said. Customers haven’t dined in since March 17. And while he was able to bring back kitchen staff, “Our front-of-the-house staff has remained completely in limbo since the day Acme shut down,” he said. “It’s been pretty awful for them. … The hospitality end of the business won’t really exist again until we reopen our doors to dine-in service.”
As difficult as it may be to remain optimistic, Callaghan and others continue to look on the bright side.
“Now that [The Patio] has been open, we are busier than we were during March and April,” Whiteheart said of Unscripted’s in-house restaurant. “I think that’s just because people are seeing the different measures that places have taken, and they want to get out of their house, stop eating their own food and really just [be] … somewhat normal again.”
Even with many planned vacations now postponed, there have been trickles of local travel that might serve as a model for others to follow.
Robert Kingsbury, for example, stayed at Unscripted in July. He stopped at the boutique hotel during an almost 10-hour drive back home to Arlington, Virginia, from Atlanta.
“I literally looked at a map and looked at what was about halfway on my journey,” Kingsbury said. “It was either Greensboro or Durham. I had been to Durham probably 10 years ago for a friend’s wedding and remember it was a cute town. … I just needed to take a day off and relax. And honestly, I was really looking forward to having some time to myself.”
He lounged poolside, ate at The Patio. No grand excursions out into the city – but it was something. Most importantly, Kingsbury didn’t feel that his safety was compromised, especially with the extra precautions taken by Unscripted.
“I’m traveling, but I’m not just throwing everything to the wind and traveling,” Kingsbury said. “I’m doing it as safely as possible.”
What’s still to be determined in Durham and Chapel Hill – and across the hospitality industry at large – is how many people will adopt Kingsbury’s mindset. That answer ties directly into the hopes that a pandemic that has cost cities and towns so much in 2020 doesn’t linger, because there are serious concerns that this multi-month dip may morph into years. And regardless of federal subsidies, adjusted business plans and additional safety measures, most businesses cannot reasonably withstand that. If another wave of increased coronavirus cases sweeps across America, the long-term economic ramifications will be heavy.
“The [Destinations International Annual Conference] projected [in July] that the travel industry is not going to totally come back until 2024 – so it’s a long road,” Amey said. “However, Durham is positioned to come back faster. And I think that’s one of the things that’s exciting for us.”
The reason behind that is Durham isn’t considered a “fly market” like, say, Charlotte or Chicago; it’s a “drive market.” During a time where people aren’t comfortable in crowded spaces like airports and airplanes, the antsiest travelers are inclined to hop in their cars, just like Kingsbury. The same ideology applies to Chapel Hill, too.
That gives both Amey and Paolicelli some optimism that this region can start experiencing serious economic recovery as early as next fall.
“We’re also urging the local community not to underestimate the strength we have to keep Durham businesses intact,” Amey said. “As conditions allow us to get back out in the community, a concerted focus on patronizing local shops, restaurants and even staycations in our hotels will help Durham bounce back faster.”
Paolicelli and Amey’s teams already redesigned their respective cities’ advertising strategies. Instead of massive indoor attractions and live concerts, “clean is the new sexy” for tourism stakeholders as the state eases out of coronavirus lockdown restrictions. In fact, Paolicelli estimated Orange County hotels have invested about $1.5 million in sanitation equipment: Everything from spraying hotel shuttles with disinfectant mist to alternative types of room service and contactless commerce. “It’s been a real trying time stripping ourselves of all of our old best practices and implementing new best practices,” Paolicelli said.
And while it’s just one man’s opinion, the early indicators are promising. “As long as you put that effort in,” Kingsbury said, “you can travel and have a good time.”
Area Hotels and Current Offerings
111 N. Corcoran St., Durham
21c is not currently offering docent tours, but guests can browse the current exhibition, “The Future is Female” at their leisure.
Rates Receive 5% off one to two night stays, 10% off three to four night stays, or 15% off five-plus night stays. Offer valid for stays through Jan. 31, 2021. Blackout dates apply. More info at 21cmuseumhotels.com/durham.
Amenities More than 10,500 square feet of exhibition space, business center, laundry service, 21c Museum shop, 24-hour valet service, pet-friendly rooms and free Wi-Fi.
Dining Counting House is currently closed. For updates on reopening and wellness policies and procedures, visit countinghousenc.com.
New Procedures & Policies Requiring mandatory temperature screenings at entrance. All guests and teammates must wear appropriate PPE and practice social distancing. For the most up to date information about cleanliness and wellness policies, visit 21cmuseumhotels.com/staywell.
214 W. Rosemary St., Chapel Hill
Rates Starting at $89
Amenities Conveniently located downtown and walkable to UNC campus. Guest rooms include complimentary Wi-Fi; charging ports; large, wide-screen TVs; individual climate control. Underground parking on-site and dog friendly.
Dining AC Lounge is open nightly 5-10 p.m. serving custom cocktails, tapas-style appetizers and dinner. AC Kitchen has a variety of grab-and-go breakfast options each morning 6:30-9 a.m., Monday-Friday, and 7-10 a.m., Saturday-Sunday.
New Procedures & Policies Elevated rigorous protocols to thoroughly clean all surfaces with hospital-grade disinfectants in guest rooms and with increased frequency throughout the hotel, primarily focusing on high-touch areas such as elevators, door handles, tabletops and others. Face coverings are required for guests and associates in all indoor areas. Hand sanitizing stations have been installed at hotel entrances, front desks, elevator banks and meeting spaces. Signage is located throughout public spaces to remind of social distancing. Added partitions at check-in provide an extra level of precaution for guests and associates.
1001 S. Hamilton Rd., Chapel Hill
Amenities Pool closed.
New Procedures & Policies Following Marriott’s Commitment to Cleanliness initiative.
345 Blackwell St., Durham
Rates Contact hotel directly for special rates and availability.
Amenities Complimentary Wi-Fi, mini refrigerators in all guest rooms, complimentary bottled water available upon request and complimentary coffee.
Dining WXYZ bar/lounge is open Wednesday-Saturday from 5-11 p.m. All guests are required to wear a mask unless they are eating or drinking. Breakfast is currently available for purchase with limited continental items Monday-Friday, 6-10 a.m., and Saturday-Sunday, 7-11 a.m.
New Procedures & Policies Aloft is consistently following all CDC guidelines and protecting staff and guests while cleaning all public areas hourly. Guests and employees are required to wear a mask at all times. To ensure staff and guests are protected, employees are not entering guest rooms until 48 hours after departure. At this time, housekeeping services are suspended during guests’ stay.
106 Mason Rd., Durham
Rates Vary by room and day of week; running midweek staycation packages/rates for two-night stays; details are online. Also offering micro wedding options: “Just the Two of Us” elopement package for up to five people or an intimate wedding for up to 30 people.
Amenities All available except for in-room massages.
Dining Serving breakfast and offering picnic basket meals, antipasto tray, etc.
New Procedures & Policies arrowheadinn.com/covid-19.html
211 Pittsboro St., Chapel Hill
Rates Starting at $119
Amenities Pittsboro Street Provisions – grab-and-go options for gourmet coffee beverages, snacks, breakfast and lunch.
Dining Crossroads Chapel Hill reopened Aug. 3 under current guidelines.
New Procedures & Policies Now guided by Hyatt’s Global Care & Cleanliness Commitment, which builds on rigorous safety and cleanliness protocols. All staff are Count On Me NC certified.
315 E. Chapel Hill St., Durham
Rates The No Strings Attached rate (starting at $178/night) includes day-of cancellation (before 3 p.m.), 2 p.m. late checkout and room upgrade (based on availability), and chef’s continental breakfast and Counter Culture coffee service delivered to your room contact-free.
Amenities Room service is available. Guest rooms are equipped with single-use toiletries and stay-over housekeeping is available by request. Valet parking is temporarily suspended, and the Restaurant and Coffee Shop remain closed.
Dining The Roof at The Durham is open Thursday-Sunday, 5-10 p.m. Reservations are required. When you arrive, a host will usher you onto the elevator, which is sanitized between each group, and seat you on The Roof. There is no bar service at this time, so servers take care of guests at their table. Guests are required to wear a mask until seated.
New Procedures & Policies Guests are required to wear face masks in common areas, unless seated for eating or drinking. Wellness checks are conducted at the beginning of each employee’s shift, and no one exhibiting signs of illness is allowed in the building. The team has increased the frequency of cleaning and disinfecting public spaces, with a focus on the counter at the front desk, elevators and elevator buttons, door handles, public bathrooms, and room keys. Using cleaning products that meet CDC guidelines to clean rooms after each guest departs and before the next guest arrives. Additional precautions include rotating hotel rooms every 72 hours when possible (the room you are checking in to will not have been occupied during this time).
201 Foster St., Durham
Rates Mention Durham Magazine or Chapel Hill Magazine at check in and receive 10% off booked rate.
Amenities Fitness center, Wi-Fi and parking.
Dining Guests are welcome to dine in the lobby, where there is seating available to practice social distancing while enjoying meals from Durham’s reopened restaurants.
Procedures & Policies Guests and associates are required to wear masks in interior public areas. Complimentary masks are available upon request. Their team requires a minimum six feet of social distancing throughout the hotel. Hand sanitizer dispensers have been placed throughout the hotel.
311 W. Franklin St., Chapel Hill
Rates Starting at $129
Amenities Free Wi-Fi, gym with Pelotons, Malin + Goetz amenities
Dining Trophy Room (full-service and to-go restaurant opening in September)
New Procedures & Policies Graduate Hotels has partnered with Procter and Gamble and the Cleveland Clinic on Graduate Cares – a COVID-19 response program upholding state-of-the-industry health and safety precautions for guests and associates. Learn more at graduatehotels.com/graduatecares
230 Science Dr., Durham
Rates Starting at $179
Amenities In-room amenities include Keurig coffee makers, safes and mini-fridges.
Dining Marketplace Barista Bar is open with an assortment of grab-and-go menu items.
New Procedures & Policies jbdukehotel.com/stay/health-and-safety-protocols
The Lodge at Duke Medical Center
(formerly Cambria at Duke Medical Center)
2306 Elba St., Durham
Located across the street and steps away from Duke Medical Center. Guest parking available on site.
Rates Beginning at $119
New Procedures & Policies lodgeatdumc.com/health-and-safety-protocols
1505 E. Franklin St., Chapel Hill
Rates $159 – $275; also introduced several new packages that guests can add on to staycation packages: ilpalio.com/packages.
Dining Il Palio restaurant is open for breakfast and dinner. Plus in-room dining, wine tastings and chef tastings.
New Procedures & Policies Expanded dining space and outdoor patio space. Hotel guests and diners must wear masks. Every aspect of service is altered to promote social distancing while continuing to provide Four Diamond service.
202 Corcoran St., Durham
Rates Starting at $89
Amenities Pool, rooftop patio, rooftop dining seating, 40 rooms with separate HVAC systems
Dining The Patio reopened June 17 at 50% capacity with modified hours, following city, state and federal guidelines. Reservation-only rooftop dining and new digital menus accessible via QR codes.
New Procedures & Policies Launched a new reservation system, requires rooms remain unoccupied for at least 24 hours between guest visits, reconfigured public spaces for social distancing, conducts daily health screenings for staff and more.
3001 Cameron Blvd., Durham
Rates Starting at $179
Amenities In-room amenities include Keurig coffee makers, safes and mini-fridges. Duke University Golf Club is open every day except Tuesday, and all guests may play on the course with tee time reservations. To learn more about golf, visit washingtondukeinn.com/duke-university-golf.
Dining The Fairview Dining Room and the Bull Durham Bar are open along with curbside takeout. Room service is available for guests. For more information, visit washingtondukeinn.com/durham-fine-dining.
New Procedures & Policies washingtondukeinn.com/durham-accommodations/health-and-safety-protocols