'It's Been Devastating': Without Conventions, Sports, Atlanta Has Already Lost $640M
Downtown Atlanta's status as a convention destination has benefited the region greatly. But this year, as the coronavirus pandemic has made large gatherings impossible, the city has missed out on $640M in expected revenue.
But Atlanta's tourism industry is banking on a return of big events in 2021 as all of the planned gatherings are still on track to take place, including college football's opening weekend, DragonCon and the SEC Championship game.
Without a viable vaccine for the coronavirus, the city's most prominent tourism officials say the city would continue to lose millions in revenue from conventions and events in 2021 and beyond.
"If we get to the fall and we don't have a vaccine, then I think it's very likely it's going to threaten the first two quarters of 2021," Atlanta Convention & Visitors Bureau President and CEO William Pate said. "The financial devastation would be significant."
Atlanta tourism officials were expecting 39 citywide conventions and events, including major sporting events that result in 2,500 or more hotel rooms booked, in 2020. Seven events took place before the coronavirus was declared a pandemic. Twenty-nine of the events have been canceled, one was postponed, and two are still on the books for later this year. The ACVB estimates that the 29 cancellations put a $640M dent in the city's economy.
“People are afraid to be in large groups, but even if they wanted to and weren't afraid of the pandemic, they still don't have the right to do that because most meetings have been canceled or postponed for months,” Georgia State University Regents Professor of Marketing Emeritus Ken Bernhardt said.
“It's been devastating,” said Bernhardt, who also is an ACVB board member.
Gov. Brian Kemp extended the state's ban on gatherings of more than 50 people until Aug. 11. The Georgia World Congress Center Authority has shuttered Centennial Olympic Park, one of the city's biggest tourist attractions, indefinitely. That park usually caters to a million out-of-town tourists annually, according to the GWCCA.
The GWCCA, which owns the 1.5M SF Georgia World Congress Center and Mercedes-Benz Stadium, estimates it will lose $4.3M in fiscal year 2020, which ended June 30. The GWCCA is projecting total revenue losses for 2021 will amount to more than $9M.
The convention business is a huge part of Atlanta's economy. The city hosted more than 750 meetings and conventions in 2018, with 56 million visitors who spent $16B, according to the ACVB's latest economic impact study. Pate said the agency was projecting a 3% to 4% increase for last year.
The loss of a convention can be particularly painful for a local economy, as many big conventions rotate among host cities every year.
One event for Atlanta is still scheduled to occur. AmericasMart is hosting its five-day Atlanta Market retail buying event starting Aug. 13. That event typically attracts upward of 85,000 attendees and produces an economic impact of $127M to the local economy, Pate said. This year, Pate said organizers expect the economic impact to be a fraction of its normal amount, with attendance expected to be between 10,000 and 15,000 people, assuming Kemp doesn't extend his gathering ban beyond next week.
The loss of convention business has a much larger ripple effect on the city's economy.
Atlanta expects that its revenue from city's hotel/motel tax — a 7% surcharge on all hotel stays within the city — will drop by $12.7M next year to $63.9M. But the pain in lost convention and tourism business goes beyond hotel rooms.
On top of the tax, the city is expecting to lose $62.6M in a combination of sales taxes, license and permit revenues, utility revenues and alcoholic beverage taxes, according to Atlanta's proposed 2021 budget.
“This has been a huge blow to our city, and frankly I'm surprised we're not seeing a greater economic impact in our city, in Georgia and in our country,” said Cynthia Alford, a prominent Atlanta event planner who has organized Atlanta events for companies like Delta Air Lines, Coca-Cola, Georgia Pacific, Microsoft and Truist.
Atlanta hotels especially feel the pain. Hotel occupancy within the central business district — from Buckhead to Downtown Atlanta — has dropped to 28%, according to lodging research firm STR. That has led to a more than 70% drop in revenue per available room, or RevPAR, the hotel industry's top performance metric, to $33. The CBD's loss is far more acute than the Atlanta area as a whole, where hotels are 50.5% occupied, according to STR.
Other major Downtown Atlanta tourist attractions such as the Children's Museum of Atlanta, the Georgia Aquarium and the World of Coca-Cola have reopened, which has helped boost some tourism traffic into the city, mainly from Georgians taking short-distance trips, Bernhardt said. But the overall loss of business is widespread.
“Think about the Coca-Colas that aren't being sold, the beers that aren't being sold," said Alford, a managing director of Destination South Meetings & Events and a member of the ACVB board. "There are no concerts, there are no live sports. There is no theater."
While Atlanta's convention pipeline for 2021 has been largely unaffected, some express skepticism whether that will remain the case without a viable vaccine. For one, the convention business is one that plans well ahead of dates. Most of the big events scheduled for 2021 were planned and solidified five to seven years ago. Conventions in Atlanta have been scheduled, in some cases, all the way until 2030.
“Really, if you look at the next five years in Atlanta, our business is very, very strong. Conventions want to come to Atlanta,” Pate said. “The good news is our industry is a good economic indicator of the future. But [we've] got to get through this short-term issue.”
How short-term the decimation to Atlanta's tourism business will be is anyone's guess at this point.
“I thought by September everything would be up and running again. Now that runway becomes longer and longer,” Alford said. “We're now moving into Q1, and just last week we had almost a million dollars ... in cancellations.”
Contact Jarred Schenke at email@example.com.