Tourism industry warns of virus-sparked layoffs, closures

Johnathan Hettinger Montana Free Press
Friday, March 20, 2020

The ski lifts at Whitefish, Red Lodge, and Big Sky are empty.

The pools at Chico Hot Springs are closed.

Yellowstone National Park’s visitor centers and entrance stations are unmanned.

The coronavirus pandemic is putting a major damper on Montana’s outdoor recreation industry, which, at $7.1 billion and 71,000 jobs, is the secondlargest sector of the state’s economy.

“This is not going to be a little downward. We’re talking about a 25% decline in the travel industry globally. That doesn’t leave us out, here in Montana,” said Norma Nickerson, director of the University of Montana’s Institute for Tourism and Recreation Research and a research professor at the university. “We may not be quite that steep. But that might not even be the bottom.”

Already, business owners are concerned about the impact the virus could have, according to surveys released Tuesday by the institute. One survey, conducted March 11 through 13, focused on travelrelated businesses, while the other survey, conducted March 11 through 15, asked travelers about their plans.

By Friday, March 13, 36% of the 394 travel-related businesses that responded to the survey had seen cancellations.

About half of respondents expect they will have to reduce their workforce because of a downturn in business related to the pandemic, according to the survey.

Only 37.9% of businesses said they would compensate employees for missing work, according to the survey. More than half of guiding businesses responded that they would be “very unlikely” or “unlikely” to compensate employees for missing work.

“I think there’s going to be a lot of people going after unemployment dollars because they have no job,” Nickerson said.

State announces help for unemployed, small businesses

A downturn in tourism will have ripple effects across the state, Nickerson said.

In a news conference on Tuesday afternoon, March 17, Gov. Steve Bullock said that workers laid off in response to pandemic concerns will be eligible for unemployment benefits, and that the state will streamline applications to help get assistance to workers quickly.

Bullock also announced that emergency loans of up to $2 million with 30-year terms will be available through the Small Business Administration at an interest rate of 3.75%.

Nickerson said she is most concerned about small businesses. She said that if the pandemic lasts into July or August, guiding companies could lose their entire season.

“All of the little guys are a little concerned they’re going to die off the vine,” Nickerson said.

Also in the survey, 22.9% of businesses said they might temporarily close because of the virus.

Gateway communities: Tourism is the ‘only industry we have’

Some communities will be hit harder by tourism contraction than others, like the gateway communities to Yellowstone National Park.

“That’s the only industry we have,” said Mary Sue Costello, president and CEO of the West Yellowstone Chamber of Commerce. “We have no manufacturing, so everything else relies, either directly or indirectly, on tourism. The grocery stores are going to do as well as we do in tourism. Everything is related.”

In West Yellowstone, the next month is typically slow, Costello said. Over-snow travel was halted for the season on March 15. The west entrance to Yellowstone doesn’t open until April 17.

In Gardiner, Terese Petcoff, executive director of the Chamber of Commerce, said a tour operator in Gardiner has a cancellation as far out as September. Cancellations were either groups of older people or international groups, Petcoff said.

“Businesses are just taking it one day at a time, preparing for what the potential impacts could be,” she said. “I know they’re nervous, but they’re hopeful. All remain positive. Obviously, something like this has never been seen before.”

Xanterra CEO Andrew Todd issued a press release saying the company, which operates lodges in Yellowstone and Glacier, is instituting additional health-protection measures.

Marriott Hotels has furloughed tens of thousands of employees around the world.

In Big Sky, the Yellowstone Club has suspended operations. The exclusive ski club said it will pay its seasonal employees through the end of its season and encourage yearround members to work remotely.

“It is a complex situation. Our goal is to get as many people out of Big Sky as possible and back to their homes,” said Krista Traxler, director of marketing, in an emailed statement. “Many of our members flew out of Montana yesterday and today. This is important for the safety of our employees and full-time residents in Big Sky. Ultimately, if an outbreak were to occur, we want to prevent the Big Sky hospital from being overwhelmed. We are trying to be proactive leaders in the community.”

Only about 8% of respondents to the ITRR survey about traveling reported canceling a planned trip, though 16% of international travelers had canceled a trip.

Airport downturn worse than 9/11

Already, Bozeman Yellowstone International Airport has seen a downturn in travelers due to ski resorts closures, said Brian Sprenger, airport director. The downturn, which has resulted in planes arriving at less than 50% capacity on all airlines, is expected to last at least into early part of April.

Sprenger said he expects to see nationwide cancellation of flights, and the airport is considering scenarios in which the number of passengers declines as much as 80 percent over the next two months.

The Bozeman airport has been growing significantly. This summer, the airport was scheduled to increase the number of flights from certain destinations, Sprenger said. He isn’t sure if that increase will happen now.

“We’re probably going to see the first major decline in passengers in over a decade,” he said.

Sprenger, who is a member of the governor’s Tourism Advisory Council, said one mitigating bright spot is that this is already among the slowest times of year for tourism.

“The biggest impacts [of the coronavirus] are likely going to be in the spring, a time of year when tourism is less impacted,” he said.

The airport authority will likely not lay off any of its 50 employees, he said. But he wasn’t sure about the 1,000 or so local employees of airlines and concessionaires.

Sprenger said the only event that has been comparable during his career was Sept. 11, 2001, when airports closed for several days after planebased terrorist attacks in New York City and Washington, D.C. He said it took months for the airline industry to recover.

“This impact is truly significantly harder and more harsh than that was, even,” Sprenger said. He said the coronavirus impacts are different, because of the immediate shutdown of conferences and resorts and the curtailing of business travel.

“That is going to be for the next several weeks or months,” he said.