The tourism and hospitality sectors took a major hit in 2020 but are expected to slowly rebound in 2021 with positive news about the COVID-19 vaccine. Experience Grand Rapids Executive Director Doug Small is among industry leaders predicting it will take longer than a year for tourism to return to pre-pandemic levels, but a few larger projects on the horizon could provide Grand Rapids with some momentum in the new year. Hotels hit historically low occupancy rates in 2020, and Kent County hit a low in April with an 18 percent average occupancy rate. Occupancy levels are expected to increase in 2021, but are still expected to fall short of pre-pandemic levels.
How do you think different parts of the tourism industry will come back in 2021?
The only business we really had in 2020 once COVID-19 hit was what we call the leisure business, people coming just to get away. It was a big thing for us when there were concerts in town, and the Grand Rapids Symphony had big shows going on all the time. Those will be the last things to come back and that will have a big impact on how big our leisure traffic is in 2021.
The first that will come back the strongest will be corporate transient and professionals going to visit different corporate locations. I think the group meetings sector will spring back, but not for at least six months.
So much depends on executive orders — right now that’s the big guessing game. We presented a plan of action to our board for 2021, but that could change in January.
How important is it that discussions continue in 2021 about constructing another convention center hotel downtown?
Our competitors have not slowed down. They’re building hotels and expanding their convention centers, some in the middle of the pandemic.
A destination asset study commissioned by Grand Action in 2016 said there is an immediate need to add a 400-600 room hotel to keep pace with competition. If we don’t pursue what the study said was needed, we’re going to be behind.
It’s going to take a couple more years for approval and for the project to get off the ground. Then a project of that scope and size will take a couple of years to build, so you’re looking at four years. If my prediction comes true and we come back to pre-COVID numbers some time in 2023, that hotel will come shortly after and we can start running conventions and events out of it.
What do you see in the future for larger downtown venues?
We’ll see closings. We haven’t even seen yet what will happen in the restaurant business. How much longer can an Intersection and a B.O.B. hang on without customers? What I don’t like about that is we were starting to get a reputation between places like 20 Monroe Live, DeVos Convention Center and Van Andel Arena as a pretty good music and event town. If you lose The Intersection or a 20 Monroe Live, we’re back to where we were in 2010 again, and it takes so long to build that up. It’s unfortunate. I hope I’m wrong, but I see some of these smaller venues having to close.
How have hotel occupancy levels shifted this year and what do you expect to see in 2021?
Occupancy levels at Kent County hotels year-to-date through November are around 38 percent. The forecast nationally for year-end 2020 is 41 percent. We anticipate that our revenue will drop about 45 percent from what was forecasted when we started the year in 2020. In 2021, we are budgeting revenues to be about 30 percent less than what was realized in the year-end revenue of 2019.
What are you looking forward to in the new year?
Seeing people. I also think the continuation and seeing the light at the end of the tunnel of the river restoration project will give our industry a little boost, along with the announcement of the amphitheater project (at 201 Market Ave. SW) going forward. Those will be two things saying Grand Rapids is coming back and doing just fine.
News coverage in the real estate and development section of MiBiz is made possible by advertising support from The Michigan Economic Development Corporation. MEDC markets Michigan as the place to do business, assists businesses in their growth strategies and fosters the growth of vibrant communities across the state. This advertisement has no effect on editorial consideration in MiBiz.