CACHE COUNTY – The only word to describe the impact of the coronavirus outbreak on hotels and restaurants in Cache Valley is “disaster.”
That was the candid assessment of Tourism Director Julie Hollist Terrill in a report to members of the Cache County Council on June 9.
“We’re in a terrible situation as far as the tourism industry goes,” she admitted. “We’ve probably been devastated more than any other industry in our state and our nation.”
Although it was anticipated, the details of the bad news were still a bitter pill for council members to swallow. Much of Cache County’s revenue comes from sales taxes on purchases related to tourism, especially the county’s RAPZ (Recreation, Arts, Parks and Zoos) and restaurant taxes.
“In March of this year, I was really sad because our room occupancy rate (in local hotels) went down to 41.6 percent,” Terrill said, noting that the economic impact of the coronavirus pandemic was only starting to be felt around mid-March. “By April, our hotels only reported 27.4 percent occupancy. That compares to 53.9 percent occupancy in April of 2019, which had actually been a little low for a normal April.”
To make matters worse, Terrill said the average rate being charged for a room per night in April was only $68, compared to $90 a night a year ago.
“That means that we’re renting a lot fewer rooms and getting a lot less money for each rental, about 24 percent less,” she added.
Another measure of success in the hotel industry is revenue per room, which combines the number of rooms rented and the rental rate, divided by the total number of rooms available.
“We’re down there, too,” Terrill explained. “Last year at this time, our revenue per room was $48.86. This year, it’s $16.96.”
While acknowledging that the loss of business for local hotels is “pretty alarming,” the tourism director said the problem is statewide. For example, the occupancy rate for hotel rooms in Salt Lake County was 71 percent in April of 2019. This year, it was 17 percent.
Terrill’s best estimate of the impact of that business loss on Cache County coffers is that monthly tax revenues on room rentals for the second quarter of 2020 will likely be around $15,000, compared to an average $57,000 per month last year.
Terrill said Cache Valley restaurants were also hard-hit by the pandemic, thanks to state social distancing guidelines that closed public dining rooms in mid-March.
A partial rebound is underway in the restaurant community, however. Terrill said that local eateries that initially reported a loss of 80- to 90-percent of their business were able to make a paradigm shift to curbside pick-up and home delivery of their meals.
“After a period of adaptation, a lot of our restaurants are now running two business models under a single roof,” Terrill explained, one for take-out service and another for limited dining-in under the now relaxed statewide Yellow/Low risk status. “But there were complications we didn’t foresee. Some of them are now managing separate staffs for sanitation and food ordering. The additional costs were also surprising; switching to deliver and curbside service resulted in some restaurants reporting their expenses are up by 20- or 30-percent for take-home packaging.”
But anecdotal reports from both hotel and restaurant managers are still grim.
Terrill said that the Riverwoods Conference Center reported losing two large bookings due to recent media reports about a new spike in coronavirus cases in Cache Valley.
A valley catering service also reported having lost up to $1 million in business contracts.
The only bright spots in an otherwise bleak situation, Terrill concluded, is that drive-thru food and drink shops are doing well and the Anniversary Inn is keeping busy accommodating couples eager to escape from their own homes.