Visit Austin — it’s way better live.
That was the theme of a national ad campaign that the city’s convention and visitors’ bureau was ready to launch right before COVID-19 slammed the door on the city’s thriving hospitality industry.
Now, as vaccines roll out and travel is returning, Visit Austin is finally unfurling that message in hopes of drawing tourists — and eventually conventions — back to Central Texas.
“The campaign has a stronger resonance now than it did before the pandemic, just because everyone is ready for everything to be experienced live,” said Julie Chase, vice president of Visit Austin. “Our music, art, culinary scene and local businesses are all best live, and now it’s happening.”
Although out-of-town visitors are returning to Austin’s hotels, restaurants and entertainment districts, industry analysts estimate it will take at least two years for the region’s hospitality industry to get back to 2019 levels.
The Austin area’s leisure and hospitality sector shed more than 60,000 jobs in the initial weeks of the pandemic. With only about half of those jobs having returned since then, the sector accounts for the majority of the region’s continued pandemic-related job losses.
Travel into and out of the region plummeted, as well. Passenger traffic at Austin-Bergstrom International Airport plunged 63% in 2020 as a result of the COVID-19 pandemic. The airport had about 6.5 million passengers last year compared with 17.3 million passengers in 2019, its highest-ever passenger travel year.
The 2020 passenger count is the lowest number for ABIA since the airport opened in 1999. Prior to COVID-19, the airport had recorded 10 consecutive years of record-setting passenger growth.
But there are signs of a turn-around: during the recent University of Texas graduation weekend and NASCAR events, local hotel rates and occupancies were near 2019 levels, according to Visit Austin.
On Memorial Day, passenger traffic rose to 25,354 at the Austin airport, the single busiest day since the pandemic began.
“The overall trend we’ve been seeing is really the return of leisure travelers,” said ABIA spokesman Bryce Dubee. “That’s been the big piece right now.”
Business travel still lags
What hasn’t yet bounced back, however, is business travel.
Hotel ZaZa Austin opened in the heart of Austin’s Warehouse District in September 2019, about six months before the pandemic struck.
At the time, Matthew Nuss, president of hotel operations at Z Resorts, which operates Hotel ZaZas in Dallas and Houston, said Austin was the ideal market for the luxury brand because of its diverse mix of visitors.
“We love Austin because it’s not your typical Monday through Thursday business market. It’s a seven-day-a-week market,” Nuss said. “We’ve had a great cross section of the business community come through the hotel already, from Google to Indeed to many others. Austin is a big association town, so a lot of the associations are in taking tours.”
While business travel is still mostly shut down, Hotel ZaZa is seeing increased bookings for other events, Nuss told the American-Statesman.
“We are seeing increased room occupancy and foot traffic into our restaurant and lounge, pool area, and spa. This trend has been steadily inclining since the governor lifted mandates in March with the biggest increase in May thanks to UT Graduation, NASCAR, and Memorial Day weekend — all near sellouts for us along with 2021 highs in food, beverage and spa revenues,” Nuss said.
“We continue to see growth in advance bookings of group rooms and banquet events through 2021 and the pace for 2022 is picking up, as well. The announcement of ACL lineup had a nice impact on future bookings as has the solidification of our book of business over F1,” he said.
Nuss said business travel and corporate meetings are still mostly on hold, but he is hoping to see that change in 2022.
“We see a slight increase in office traffic downtown but would like to see the pace quicken as we head through the summer months and into fall,” he said. “We are surrounded by new office inventory and need that space to be absorbed by multi-floor tenants.”
Paul Vaughn, senior vice president with Source Strategies, a consulting firm that tracks the Texas hospitality industry, said that while the Austin-Round Rock metro lodging market is rebounding quickly, it won’t fully be back until business travel returns.
According to Vaughn, the occupancy rate for the region in March and April were at 65%, up from just under 40% in January.
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“As more people get vaccinated and events get rescheduled we expect to see a substantial boost to lodging demand over the summer. This is especially true with leisure and tourist travel,” he said. “Business and convention travel will take longer to return as many of those events are scheduled years in advance. Many companies may also be weighing the savings of virtual meetings over in-person gatherings.”
Hotel rooms in hot markets could be hard to find for specific events, especially on the weekends. The Sunday through Thursday stays are so far slower to return, Vaughn said.
Competing for travelers
Visit Austin is targeting its campaign, which includes social and digital media and email, to potential visitors in San Francisco, Chicago, New York and Atlanta.
Many cities are doing the same thing: New York, San Francisco and Asheville, N.C., are all pouring millions into marketing efforts.
“Competition is fierce for bringing visitors in,” Chase said. “We’re up against so many, and we’re all trying to bring back this very important industry to our cities.”
During the pandemic, Visit Austin says it lost 546 group visits (conventions and smaller gatherings) and 665,436 hotel room nights with an estimated economic impact of $657 million.
Looking ahead, Visit Austin has booked 184 groups visits and 188,653 hotel room nights with an estimated impact of $177 million.
Austin has some advantages moving forward. Prior to the pandemic, it had build a reputation as a top destination for bachelorette and bachelor parties, destination weddings, girls’ weekends and more.
And now it has another thing going for it — in recent months, airlines have rolled out a number of nonstop flights into and out of ABIA, which makes it even more attractive to out-of-state leisure travelers.
In May, American Airlines began flying 10 new year-round and seasonal routes into and out of the Austin airport.
Daily, year-round service from Austin to Nashville, Las Vegas, Orlando and New Orleans began May 6, with routes to Raleigh-Durham, Tampa and Washington-Dulles starting later in the summer, the airline said.
New Saturday seasonal service to Aspen, San Jose del Cabo, Mexico, and Destin-Fort Walton Beach, Florida, began June 5.
Other airlines are also adding service from Austin. Alaska Airlines said it will begin daily flights from Austin to Boise, Idaho, on July 17. Allegiant Air will begin nonstop flights this summer from Austin to Bozeman, Montana and Bentonville, Arkansas.
Meanwhile, low-cost Mexican carrier Viva Aerobus plans to offer nonstop flights to Mexico City and Monterrey beginning this month.
“The airlines know Austin in a happening destination, and they know Austinites want to travel,” said Dubee, the ABIA spokeman. “It’s really a targeted effort on leisure destinations, national parks and beach destinations.”
Another reason for the new domestic flights is that international travel has been slow to resume.
“The folks who were planning a trip to London are now planning to head out to a national park,” Dubee said. “The airlines are waiting on business and international travel to come back, so in the meantime they’re focused on making it easier to get to the places that people want to go.”