ANDERSON — Perhaps no industry has been more drastically affected by the coronavirus pandemic than travel and tourism.
Worldwide, the industry creates one out of every 10 jobs and, according to the World Travel and Tourism Council, the pandemic has led to more than 100 million job losses in that sector.
A recent report by two professors at Ball State University’s Miller College of Business suggests that the damage to the tourism industry in Indiana is so extensive, government intervention is needed.
“The economic recovery for the industry in Indiana will require a strong governmental response, funneling funds into improving the tourism infrastructure and ensuring visitors in Indiana that they will be safe to travel to and in Indiana,” said Craig Webster, an associate professor of hospitality and food management at Ball State.
According to a report coauthored by Webster and Sotiris Hji-Avgoustis, one in 23 Indiana workers is employed in various hospitality industries, and more than 152,000 jobs are directly supported by those industries. Data from 2018 cited in the report indicates that if tourism didn’t exist, each Indiana house hold would need to pay an additional $566 more in sales and local taxes to maintain the current level of tax receipts.
The pandemic has thrown many of those livelihoods into limbo. Hotel occupancy is down significantly — according to the Indiana Business Journal, more than 88,000 room nights were cancelled in central Indiana in March and April — as marquee events like the Indianapolis 500, the National FFA Convention & Expo and others were either cancelled or postponed.
As an overflow destination near Indianapolis, Madison County has absorbed some of the fallout as well.
“We’ve taken a big hit,” said Matt Rust, executive director of the Anderson Madison County Visitors Bureau. “Our funding comes from our innkeepers’ tax, which is our hotel tax. It’s the 5% tax that’s charged on an overnight stay for someone staying in any of our hotels.”
With occupancy declining precipitously — especially in the second quarter of the year — that funding has all but dried up, Rust said.
The question of how — or whether — assistance should come from outside the industry is a complicated one. On one hand, tourism is seen by many as an enterprise that depends largely on discretionary income, so the idea of government aid for those businesses is likely to draw scrutiny. On the other hand, businesses that depend on leisure spending often funnel those dollars to local governments in the form of taxes and other spending.
“We’re going to have to look at what parts of our industries overall in Indiana are suffering, and then make a priority list on how we can possibly tackle those issues,” said state Rep. Melanie Wright, D-Yorktown. Wright serves on the Indiana House Ways and Means Committee, where legislation addressing budgetary issues originates. “I think that this budget session will be very interesting because this (pandemic) is something we haven’t seen before, and I think we’ll have to prioritize in a different way, because we know that there are still people out there who are obviously suffering financially and emotionally.”
Despite painting a bleak picture of the pandemic’s effects, the Ball State report suggests that the pandemic may offer a silver lining to distressed businesses: a chance to, in some ways, start over.
“Many places will have a chance to have a fresh start,” Webster and Hji-Avgoustis wrote. “This is an opportunity for Indiana to rebrand itself in any way that it wants. However, timing is key. Those destinations that recovered from major cataclysms used the period as a time to rebrand themselves, taking advantage of the opportunity and communicating this to the general public and potential visitors.”
Rust agreed that his office — and many in the tourism industry — will need to re-imagine some of their most basic business practices to thrive in a post-pandemic world.
“We’re looking at things across the board,” Rust said. “How is this going to change for us? It’s not just here in Madison County, but Hamilton County and Delaware County — all the visitors centers across the state and across the country are looking at that. It’s a different day, and it will be. This is going to take us a couple years, I think, to really recover.”