Hospitality Industry Reels in Wake of Emergency Public Health Closures

As the ramifications of the novel coronavirus unfold in the U.S. and around the globe, emergency public health closures across Montana have dealt an immediate blow to local economies, leaving thousands of workers suddenly and unexpectedly displaced.

In the Flathead Valley, businesses including bars and restaurants were quick to comply with the orders from state and county officials to close public spaces and dining areas, with many tailoring their food services to accommodate takeout and delivery orders only — effectively keeping the lights on and a core staff in place, but accounting for a slim margin of needed revenue.

At the Whitefish Lake Golf Club, Whitefish Lake Restaurant owner Doug Reed said the popular restaurant shifted to a takeout-only model on March 17, a few days before countywide enforcement of the policy and after confabbing with other local business owners about proactive measures.

“Every day has gotten busier,” Reed said on March 23. “We had eight people on staff this weekend that wouldn’t be working otherwise, so it’s been encouraging. It’s still only a fraction of what we would normally do in business, but it’s been encouraging. Of course it’s all local customers. We know 95 percent of the customers placing orders because they’re doing it to help and support us.”

That help and support was on prominent display throughout the valley as social media posts encouraged the public to patronize local businesses by purchasing takeout meals, bottles of wine and spirits, as well as gift cards; however, it hasn’t offset the need for many businesses to layoff or furlough workers.

“Offering a limited takeout menu helps keep a core staff in place who really need the work, but others opted to start collecting unemployment benefits,” Pat Carloss, who owns Tupelo Grille and Abruzzo Italian Kitchen in Whitefish, as well as Gunsight Saloon in Columbia Falls.

Unemployment benefits are more accessible under emergency rules enacted by Montana Gov. Steve Bullock that waive the typical one-week waiting period, and which allow a broader swath of out-of-work employees to claim assistance under the coronavirus-related circumstances.

“Waiting a few weeks for financial assistance isn’t an option for a lot of people in this industry,” Carloss said. “We’re trying to take care of everyone, and we’ll see where this goes, but if this continues past two months we’ll all be worried. But for now we’re able to pay some employees. And we’re really grateful to our customers who have been placing orders and spreading the wealth a little bit.”

At Whitefish Mountain Resort, which shut down operations on March 15, closing the season a full three weeks ahead of schedule, hundreds of seasonal and full-time workers lost their jobs, even as the ski area offered optional work assignments and free meals to employees impacted by the sudden closure.

Still, as a primary winter attraction for visitors to Northwest Montana, the ski area’s closure sent tremors throughout the local economies as cancellations mounted and the travel and tourism industry grinded to a halt.

Most hotels were still accepting overnight guests but reported widespread cancellations and limited amenities as the coronavirus outbreak curtailed the hospitality industry’s ability to accommodate guests.

At the Lodge at Whitefish Lake and the Firebrand Hotel, food and beverage services were truncated and spas and fitness centers were closed, while rooms were disinfected and reusable items like cups and glasses were replaced with disposable alternatives.

“We wouldn’t normally do that given our environmental concerns, but we’re taking this very seriously,” said Edna White, sales and marketing director for Averill Hospitality, which owns both hotels. “There has been a dramatic decline in guests and guest services, but that means that people are taking this seriously, which is good because anything we can do to shorten the duration is the best approach.”

Concern within the travel and tourism industry, and those industries reliant on it, continues to rise. Nationally, enforced or recommended travel restrictions are set to generate significant economic hardship across the travel industry. The temporary ban on European travel to the United States alone is set to cost the industry more than $3 billion in visitor spending.

According to a March 16 report by the University of Montana Institute for Tourism and Recreation Research (ITRR), which conducted a study on impacts to the state’s travel industry from March 11-13 — before Montana had reported its first cases — 36% of travel business owners in the state had already experienced cancellations due to the coronavirus. Nearly 50% of hotel/motels and other accommodation businesses had cancellations due to the coronavirus as well as 30% of outfitters and guides.

There were 394 Montana travel-related businesses that responded to the survey within 48 hours, demonstrating a high level of interest and concern within the business community, Norma Nickerson, ITRR’s director.

One reason for Montana business owners to be concerned are recent estimates from the World Travel and Tourism Council (WTTC) that suggest the global travel sector could shrink by up to 25% in 2020 as a result of the coronavirus pandemic.

“While Montana’s travel industry is largely driven by domestic travel, recent downturns, such as the 2008 recession, have demonstrated that much of domestic travel patterns are in line with global trends,” Nickerson said. “The majority of Montana’s travel related businesses are small with little leeway if they are impacted severely due to the coronavirus, even if the duration of the impact is short. As an industry, the businesses are certainly nervous.”

According to the survey, 72% said the coronavirus would negatively impact their business, with nearly 70% believing it will reduce their revenues. Similarly, 70% said coronavirus would increase the chances of a recession in the U.S. For many owners, however, there was a “wait and see” attitude saying it is too early to tell, Nickerson said.

“Survey me in a couple weeks,” Nickerson said some respondents replied.

Although international air travel has essentially been prohibited, domestic flights continue to operate. At Glacier Park International Airport (GPIA), services have not been limited or suspended, although the airport says it is taking advanced measures to curb the spread of the coronavirus.

“In the present circumstances, we recognize the decision to fly is not made lightly and that some travel is still essential,” Rob Ratkowski, director of GPIA, stated. “To that end, the team at GPIA is committed to your safety and will continue to operate on the same schedule, while exercising precautions to help prevent the spread of COVID-19.”