Michigan tourism engine idled, waiting for coronavirus storm to pass

PARADISE, MI — Under normal circumstances, business would be picking up at Curley’s Paradise Motel about now. The low-key Upper Peninsula beachfront property is down the road from both Tahquamenon Falls and Whitefish Point, where visitors congregate every April to watch migrating hawks.

But nobody is staying in Paradise these days. The motel is closed and won’t take reservations until the coronavirus threat passes and Gov. Gretchen Whitmer lifts her stay-home order restricting travel for non-essential purposes.

“The only thing in town that’s open is the gas station so people can go to Sault Ste. Marie to get groceries,” said Curley’s motel owner Lynda Ferguson.

More: Michigan coronavirus coverage

Across Michigan, tourism businesses like Ferguson’s are hunkered down, waiting for the COVID-19 storm to pass. Attractions are shut down. Hotels are closed or sitting mostly empty. Restaurants are limited to serving locals with take-out and delivery. Events have been canceled or postponed and nobody knows for sure when that status quo will change.

Travel directors hope that pent-up demand will burst forth when restrictions finally ease and vacationers leery of airports and crowded destinations — and, potentially facing cash shortages of their own — opt instead for a Michigan road trip.

Northern Michigan in particular is well-suited to deliver on demand for secluded getaways. Already, an influx of seasonal residents trying to escape downstate cities has angered northern locals worried they may inadvertently spread the virus. Travel between homes was banned this week when Whitmer extended her stay-home order to May 1.

The welcome mats are ready for leisure travelers, but they’re not being put out yet.

“We want people to stay home and get this over with,” said Ferguson. “I’ve got people calling up wanting to rent cabins so they can isolate up here. I tell them ‘no, I’m closed. Stay home. You’re not supposed to travel.”

Michigan travel industry leaders are hopeful the tourism economy can bounce back this year, but they are also concerned about revenues already lost this spring and potential lasting damage from a global pandemic that has slammed the door on most business in Michigan.

Dave Lorenz, director of Travel Michigan, estimated at least half of the state tourism workforce is either laid-off or furloughed right now. Many are among the more than 800,000 Michigan residents who have filed for unemployment since March 21. According to state studies, tourism spending directly supports as many as 227,000 jobs in Michigan.

Earlier this week, the Michigan Restaurant & Lodging Association rolled out an employee relief fund to provide grants of up to $500 for out-of-work hospitality employees. Almost 4,000 people applied within 24 hours. Association directors say the need far outpaces the fund supply and they “definitely can’t help everybody.”

Business owners are feeling the hurt. Restaurant and lodging operations are looking for state and federal relief to help cover payroll, utilities, rent, mortgages and other expenses. Destination towns are watching nervously as the pandemic shutdown eats further into the dwindling pot of summer savings that many seasonal businesses rely on to survive.

“Properties that are staying open right now are losing money every day,” said Tom Nemacheck, director of the Upper Peninsula Travel & Recreation Association. “How long can you do that until it’s more profitable to just close?”

Pandemic restrictions on business and travel hit at a critical point. Travel typically picks up in the spring. Cash reserves are often low by March and April for tourism-dependent businesses, which survive through the meager fall and winter months using money saved during the peak of visitor spending in the summer. As the snow melts, conference, convention and corporate meetings start to fill hotels as transportation becomes easier. Seasonal residents fill restaurants and stores. Pre-Memorial Day events begin to fill the calendar.

But this year, trade associations are canceling or postponing conferences. Organizations that host marquee events and festivals are canceling them. Some major casualties already include the North American International Auto Show in Detroit, originally set for June; the Bayshore Marathon in Traverse City, originally scheduled for May 23; and the nine-day Tulip Time festival in Holland, originally scheduled to begin May 2.

Those cancellations mean lost revenue for local businesses, which won’t profit from visitor traffic at bars, restaurants, hotels and retail shops. The auto show was expected to bring about 770,000 people to Detroit and have an estimated $430 million regional impact. Tulip Time has a $13-$48 million impact in Holland, depending on estimates.

Related: Tulip Time loss is double whammy on Holland

Lorenz said he’s crossing his fingers and hoping event organizers elect to postpone rather than cancel events, as the Amway River Bank Run in Grand Rapids did several weeks ago by pushing the annual race from May 9 to October 24.

Tourism directors and large event planners are watching coronavirus forecast models and case data, trying to get a sense of the threat potential this summer.

Nobody is entirely sure what the travel demand will be this summer or how social behavior and spending habits will change after the immediate threat passes. Will people still want to attend sporting events or concerts with thousands of other people? What happens if the virus returns? There are indications many won’t feel comfortable in public until either widespread testing is available or a vaccine is developed.

Traverse City Tourism director Trevor Tkach said travel marketing agencies around the state are trying to figure out when to start advertising this year. Promotion is already hampered by a drop in regional marketing revenue from reduced hotel stays, as well as the loss of statewide Pure Michigan campaign funding even before the pandemic hit.

Tkach said models from the 2003 SARS outbreak in Toronto showed the first types of travel people do after a crisis is to visit family and friends. He’s anticipating lots of reunion travel in small groups of people, or families looking for open space or seclusion outdoors.

“Even if there aren’t travel restrictions by July or August, there’s probably going to be challenges with consumer confidence,” said Tkach. “I think travelers are going to have a tough time getting in large groups of people because they’ve been trained over the past few weeks now to avoid that type of congregation.”

Dan Sippel, director of the West Michigan Tourist Association, said it’s hard to make solid plans without knowing exactly when travel restrictions will lift.

“When can we actually put the invitation out? That’s the big question,” he said.

For now, Michigan state parks are open, but amenities like bathroom and boat launches are closed. Campgrounds won’t open until May 15. In the Mackinac straits area, spring opening at historic parks and forts has, for now, been pushed to Memorial Day weekend.

Nemacheck said a complete drop in traffic to the U.P. association website indicates an overall lack of interest in travel right now. He thinks it will “crawl back” this summer.

“We see that in our social media,” he said. “You can sense this underlying desire, but not right now.”

Lorenz said a tourism comeback is inevitable.

“I think the Pure Michigan travel industry will bounce back faster than most place in the country,” he said, partly because the state offers lots of outdoor space.

“All the researchers are saying that even though people see the country is really in trouble, they are still relatively positive about their own personal situation,” Lorenz said. “Because of that, I think pent-up demand will encourage travel more quickly than we think right now.”

Read more coronavirus coverage at mlive.com/coronavirus

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